Question

Hilton Garden Inn, a division of Hilton Hotels, offers its customers two choices when reserving rooms. The customer may purchase a nonrefundable internet special of $150 per night, or pay at the refundable rate of $220 per night. Whether a customer purchases the nonrefundable internet special or the refundable room, the customer must charge the entire amount to a credit card at the time of booking. For the internet special, subsequent cancellation of the reservation results in the customer forfeiting the entire amount of the reservation. For the refundable room, cancellation prior to 3:00 p.m. of the date of arrival results in a refund of the amount of the reservation and cancellation after 3:00 p.m. results in a forfeiture of one day at the reserved rate ($220). What journal entries would Hilton Garden Inn record for the following transactions assuming it attempts to make correct entries every day? Ignore the journal entries involving expenses. Assume that credit card companies credit Hilton Garden Inn’s bank account with cash on the same day that Hilton Garden Inn transmits a charge to a customer’s credit card, which is the day of the initial reservation.
a. On February 2, 2013, a customer makes a nonrefundable internet special reservation for four nights beginning February 16, 2013. The customer arrives at the hotel on February 16, 2013, and departs on February 20, 2013.
b. On February 2, 2013, a customer makes a nonrefundable internet special reservation for four nights beginning February 16, 2013. On February 14, 2013, the customer cancels the reservation.
c. On February 2, 2013, a customer makes a refundable reservation for four nights beginning February 16, 2013. The customer arrives at the hotel on February 16, 2013, and departs on February 20, 2013.
d. On February 2, 2013, a customer makes a refundable reservation for four nights beginning
February 16, 2013. On February 14, 2013, the customer cancels the reservation.
e. On February 2, 2013, a customer makes a refundable reservation for four nights beginning February 16, 2013. At 6:00 p.m. on February 16, 2013, the customer cancels the reservation.



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  • CreatedMarch 04, 2014
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