Eastern University had the following transactions at the beginning of its academ
ID: 2579621 • Letter: E
Question
Eastern University had the following transactions at the beginning of its academic year:
Student tuition and fees were billed in the amount of $7,050,000. Of that amount, $4,550,000 was collected in cash.
Pell Grants in the amount of $2,005,000 were received by the university.
The Pell Grants were applied to student accounts.
Student scholarships, for which no services were required, amounted to $490,000. These were applied to student tuition bills at the beginning of each semester.
Required:
Prepare journal entries to record the above transactions assuming:
a. Eastern University is a public university.
b. Eastern University is a private university.
Explanation / Answer
Answer: (a)
Journal Entry When Eastern University is Public University.
1. Cash A/c dr. 4550000
Account receivable A/c dr. 2500000
To Tution Income A/c 7050000
(Being tution income recorded in the books of Account)
2. Cash A/c Dr. 2005000
To Revenue-grants A/c 2005000
(Being grnats Received)
3. Student Scholarship A/c Dr. 490000
To, Account Receivable A/c 490000
(Being student scholership adjusted with Tution Fees)
4. Tution Income A/c dr. 7050000
Grants A/c dr. 2005000
To Profit and Loss A/c 9055000
(Being income recognised in Profit and Loss A/c)
5. Profit and loss A/c dr. 490000
To Scholership A/c 490000
(Being Expenses recognised in P/L accounts)
Ansewer: (b)
When Eastern university is Private University
1. Cash A/c dr. 4550000
Account receivable A/c dr. 2010000
To Tution Income A/c 6560000
(Being Net Tuttion income recorded in the books)
2. Cash A/c dr. 2005000
To Revenue-grants A/c 2005000
(Being Grants Received)
3. Tution Income A/c dr. 6560000
Revenue-Grants A/c dr. 2005000
To P/L A/c 8565000
(Being Income recorded in the P/L Account)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.