Splish Splash Art is a centre that offers children’s music and dance lessons. Splish Splash prepares annual financial statements and has a December 31, 2020, year-end.

a. On September 1, Splish Spash Art collects $15,000 cash for dance lessons running from September 1, 2020 to December 31, 2020.

b. On October 1, Splish Splash Art collects $5,000 cash in advance from the Music Box Inc. ($2,500 per month) to rent its performance stage for the full month of December 2020 and January 2021.

c. On October 1, 2020, Splish Splash Art collects $5,000 cash for four months of music lessons for a local private school. The lessons run from October 1, 2020 to January 31, 2021.

Required

For each transaction, record the initial journal entry and the adjusting entry required on December 31, 2020.