Question

qs 11-4 (algo) unearned revenue lo c2
ticketsales, incorporated, receives $5,440,000 cash in advance ticket sales for a four - date tour of bon jovi. record the advance ticket sales on october 31. record the revenue earned for the first concert date of november 5, assuming it represents one - fourth of the advance ticket sales. ticketsales, incorporated initially records prepaid and unearned items in balance sheet accounts.
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journal entry worksheet
1 2
record the cash receipt in advance of concerts.
note: enter debits before credits.
date general journal debit credit
october 31

Explanation:

Step1: Record cash receipt

When cash is received in advance for ticket sales, cash is debited and unearned revenue is credited. Cash increases (debit) and a liability (unearned revenue) is created (credit).
Debit: Cash $5,440,000$; Credit: Unearned Revenue $5,440,000$

Step2: Record revenue earned

When the first - concert date occurs and one - fourth of the advance ticket sales is earned, unearned revenue is debited (decrease in liability) and revenue is credited (increase in revenue).
The amount of revenue earned is $\frac{5440000}{4}=1360000$. Debit: Unearned Revenue $1,360,000$; Credit: Ticket Revenue $1,360,000$

Answer:

Date	General Journal	Debit	Credit
	Unearned Revenue		$5,440,000$
November 5	Unearned Revenue	$1,360,000$
	Ticket Revenue		$1,360,000$