Exercise 4.9

"Among the ledger accounts used by Rapid Speedway are the following: Prepaid Rent, Rent Expense,

Unearned Admissions Revenue, Admissions Revenue, Prepaid Printing, Printing Expense, Con-

cessions Receivable, and Concessions Revenue. For each of the following items, provide the jour-nal

entry (if one is needed) to record the initial transaction and provide the adjusting entry, if any, required

on May 31, assuming the company makes adjusting entries monthly.

Question a. - On May 1, borrowed $600,000 cash from National Bank by issuing a 9 percent note

payable due in three months.

Question b. - On May 1, paid rent for six months beginning May 1 at $14,400 per month.

Question c. - On May 2, sold season tickets for a total of $720,000 cash. The season includes 60

racing days: 15 in May, 20 in June, and 25 in July.

Question d. - On May an agreement was reached with Snack-Bars, Inc., allowing that company

to sell refreshments at the track in return for 10 percent of the gross receipts from refreshment sales."