[Solved] Lux Hotels,Inc

Question 246

Lux Hotels,Inc.has signed a service outsourcing contract with Deluxe Rooms,Inc.for $3 million,which was received in cash at contract inception.Under the agreement,Deluxe Rooms is obligated to clean and prepare over 5,000 hotels rooms managed by Lux Hotel on a daily basis from August 1,2016 to July 31,2017.
Required: Prepare any journal entry that Delux would record:
(1)at inception of the contract and
(2)at the end of 2016 to recognize all revenue associated with this contract that should be recognized in 2016.

10+ million students use Quizplus to study and prepare for their homework, quizzes and exams through 20m+ questions in 300k quizzes.


Explore our library and get Accounting Homework Help with various study sets and a huge amount of quizzes and questions


Study sets





Upload material to get free access

Upload Now Upload Now
Upload Now

Invite a friend and get free access

Upload NowInvite a friend
Invite a friend

Subscribe and get an instant access

See our plansSee our plans
See our plans