Chapter 2 (Accounting Cycle Steps 2, 3, & 4) ACCOUNTING CYCLE STEP 2: Journalize each of the following Blue Raider Adventure Park (BRAP) transactions in the general journal: you may omit explanations. Use the general journal working papers in your packet. August 1 Matt opens a business checking account in the name of RAP and makes an initial deposit of $5,000. Matt had previously withdrawn this $5,000 from his personal savings account August 1 Matt is unable to borrow money from the local bank given his youth, lack of business experience, and lack of a substantial credit history. However, his grandfather fully supports Matt's efforts to become an entrepreneur, so he loans Matt $7.000 at 6% interest to be repaid in two years. Matt deposits these funds into the BRAP checking account. August 7 Matt goes to Play It Again Sports and pays $1,925 to purchase gently used canoes, paddles, lifejackets, ziplining harnesses, etc. to be used the park. These items will collectively be identified as "Equipment in the accounting records.) August 15 Matt purchases a large, attractive sign for the new park at a cost of $750. The sign maker knows Matt's family, so she agrees to extend credit to BRAP for 30 days. August 20 BRAP pays $300 to create, print and distribute flyers to all the local schools and youth organizations to advertise that the new park will open on September 1 August 28 BRAP pays a total of $5,620 to have the child-appropriate obstacle and zipline courses constructed that same day, inspection and certification are included in these amounts. These two courses will collectively be identified as "Activity Courses" in the accounting records.) Matt recognizes the fact that he could be sued if a child gets hurt in the park, so BRAP pays $615 to purchase 3 months of general liability insurance for coverage from September 1 through November 30. September 7 Matt establishes a 30-day credit account at a local business on behalf of BRAP. He immediately uses the account to purchase $460 in various supplies for the park. September 10 BRAP sells 60 tickets for $15 each to local school children for admission to the park on that same day. (All ticket sales by BRAP are cash sales unless otherwise noted.) September 14 BRAP pays for the sign purchased on August 15. September 17 The Boys and Girls Club of Rutherford County brings 80 disadvantaged children to BRAP. Matt agrees to accept a reduced price of $12.00 per ticket and wait 30 days to receive payment, which will be paid by the Club rather than by the children. September 18 BRAP pays $75 to have the grass mowed at the park. September 22 BRAP sells 45 tickets for $15 each for children in two local Boy Scout troops for admission to the park on that same day. September 24 BRAP receives a check from the Boys and Girls Club of Rutherford County in the amount of $450 to partially pay for the tickets purchased on September 17. September 25 BRAP pays wages in the amount of $365 to two of Matt's friends who worked on days when children were in the park to assist the children with the various activities. September 28 Matt is satisfied that BRAP has more than a sufficient amount of operating cash in its checking account, so he writes himself a company check for $800 and deposits it into his own personal checking account. September 30 BRAP receives a check in the amount of $345 from Ms. Hughes, a local teacher, to purchase tickets for her 2 graders. She plans to bring them to BRAP for a field trip on October 3. Helpful Journalizing is the process of recording each transaction in the general journal in chronological (date) order using appropriate account titles and properly characterizing the increase or decrease to each account as either a debit or a credit, based on the account's normal balance. Debit lines are listed first, Credits account titles are slightly indented, and DEBIT AMOUNTS MUST EQUAL CREDIT AMOUNTS for each and every individual transaction. Hints