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Posa Hotels, Inc., has a sixth-night-free policy. Every sixth night a guest stays at the hotel is free. Because not all guests stay enough nights to earn a free stay, on average the number of free nights redeemed is 70% of the maximum possible number of free nights available one obtains by dividing the total number of paid nights the hotel has had by 5. Rooms at Posa Hotels cost $300 per night. In 20X1, Posa had a total of 100,000 paid room-nights and collected a total of $30 million from customers. Also in 20X1, customers redeemed a total of 10,000 free room-nights. Some of the room-nights awarded were based on customers' paid nights from previous years and some were based on paid nights from the current year. Required: Prepare journal entries to record revenue for 20X1 for Posa. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) No 1 2 Transaction 1 2 Cash Answer is complete but not entirely correct. General Journal Liability for free rooms Sales revenue Liability for free rooms Sales revenue Debit 30,000,000 3,000,000 Credit 4,200,000 25,800,000 3,000,000

Posa Hotels, Inc., has a sixth-night-free policy. Every sixth night a guest stays at the hotel is free. Because not all guests stay enough nights to earn a free stay, on average the number of free nights redeemed is 70% of the maximum possible number of free nights available one obtains by dividing the total number of paid nights the hotel has had by 5. Rooms at Posa Hotels cost $300 per night. In 20X1, Posa had a total of 100,000 paid room-nights and collected a total of $30 million from customers. Also in 20X1, customers redeemed a total of 10,000 free room-nights. Some of the room-nights awarded were based on customers' paid nights from previous years and some were based on paid nights from the current year. Required: Prepare journal entries to record revenue for 20X1 for Posa. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) No 1 2 Transaction 1 2 Cash Answer is complete but not entirely correct. General Journal Liability for free rooms Sales revenue Liability for free rooms Sales revenue Debit 30,000,000 3,000,000 Credit 4,200,000 25,800,000 3,000,000

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter3: Accounting For Labor
Section: Chapter Questions
Problem 16E
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Posa Hotels, Inc., has a sixth-night-free policy. Every sixth night a guest stays at the hotel is free. Because not all guests stay enough nights to earn a free stay, on average the number of free nights redeemed is 70% of the maximum possible number of free nights available one obtains by dividing the total number of paid nights the hotel has had by 5. Rooms at Posa Hotels cost $300 per night. In 20X1, Posa had a total of 100,000 paid room-nights and collected a total of $30 million from customers. Also in 20X1, customers redeemed a total of 10,000 free room-nights. Some of the room-nights awarded were based on customers' paid nights from previous years and some were based on paid nights from the current year. Required: Prepare journal entries to record revenue for 20X1 for Posa. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) No 1 2 Transaction 1 2 Cash X Answer is complete but not entirely correct. General Journal Liability for free rooms Sales revenue Liability for free rooms Sales revenue 333 33 Debit 30,000,000✔ 3,000,000 X Credit 4,200,000 x 25,800,000 x 3,000,000 X
Transcribed Image Text:Posa Hotels, Inc., has a sixth-night-free policy. Every sixth night a guest stays at the hotel is free. Because not all guests stay enough nights to earn a free stay, on average the number of free nights redeemed is 70% of the maximum possible number of free nights available one obtains by dividing the total number of paid nights the hotel has had by 5. Rooms at Posa Hotels cost $300 per night. In 20X1, Posa had a total of 100,000 paid room-nights and collected a total of $30 million from customers. Also in 20X1, customers redeemed a total of 10,000 free room-nights. Some of the room-nights awarded were based on customers' paid nights from previous years and some were based on paid nights from the current year. Required: Prepare journal entries to record revenue for 20X1 for Posa. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) No 1 2 Transaction 1 2 Cash X Answer is complete but not entirely correct. General Journal Liability for free rooms Sales revenue Liability for free rooms Sales revenue 333 33 Debit 30,000,000✔ 3,000,000 X Credit 4,200,000 x 25,800,000 x 3,000,000 X
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