Party warehouse Inc. rents a wide variety of products (e.g. tables, chairs, tents and storage containers) for special events. Upon rental, party warehouse requires a deposit which is forfeited if equipment is not returned at the end of the rental period. Deposit charged or twice the cost of the equipment, and party warehouse keeps equipment and its accounting records until deposits are forfeited. On April 5, a customer rented various containers for an event to be held on April 8, and party warehouse collected a $15,000 deposit. The containers or return on April 10.

Required:

1. Prepare the entries to record the receipt of the deposit and refund of the deposit at the end of the rental period.

2. Assume that the customer only returns 80% of the containers on April 10. Prepare the entries to record the forfeiture of the deposit.

Journal entry

1

2

3

4

Assume that the customer only returns 80% of equipment on April 10. Prepare the entries to record:

1. The forfeiture of 20% of the original deposit. Assume that the refund of 80% of the original deposit has already been recorded.

2. The cost of the containers that were not returned

Journal entry

1

2

3

4