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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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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