Record initial journal entry and adjusting entry required

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On September 1, Splish Spash Art collects $16,700 cash for dance lessons running from September 1, 2020 to December 31, 2020. On October 1, Splish Splash Art collects $7,800 cash in advance from the Music Box Inc. ($3,900 per month) to rent its performance stage for the full month of December 2020 and January 2021. On October 1, 2020, Splish Splash Art collects $12,200 cash for four months of music lessons for a local private school. The lessons run from October 1, 2020 to January 31, 2021.

Problem 1: For the above transactions, record the initial journal entry and the adjusting entry required on December 31, 2020.

Reference no: EM133001750

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