Problem
Among the ledger accounts used by Rapid Speedway are the following: Prepaid Rent, Rent Expense, Unearned Admissions Revenue, Admissions Revenue, Prepaid Printing, Printing Expense, Concessions Receivable, and Concessions Revenue. For each of the following items, provide the journal entry to record the initial transaction and provide the adjusting entry, if any, required on May 31, assuming the company makes adjusting entries monthly.
a. On May 1, borrowed $320,000 cash from National Bank by issuing a 9 percent note payable due in three months.
b. On May 1, paid rent for six months beginning May 1 at $27,000 per month.