The following item appears in the current liabilities section of Carnival Corporation’s balance sheet included in the Form 10-K for the year ended November 30, 2011: Customer deposits $3,106 million...

The following item appears in the current liabilities section of Carnival Corporation’s balance sheet included in the Form 10-K for the year ended November 30, 2011: Customer deposits $3,106 million In addition, Note 2 to the financial statements includes the following: Revenue and Expense Recognition Guest cruise deposits represent unearned revenues and are initially recorded as customer deposit liabilities generally when received. Customer deposits are subsequently recognized as cruise revenues, together with revenues from onboard and other activities, and all associated direct costs and expenses of a voyage are recognized as cruise costs and expenses, upon completion of voyages with durations of ten nights or less and on a pro rata basis for voyages in excess of ten nights....

Required

1. What economic event caused Carnival to incur this liability? Was it an external or internal event?

2. Describe the effect on the accounting equation from the transaction to record the customer deposits.

3. Assume that one customer makes a deposit of $1,000 on a future cruise. Prepare the journal entry on Carnival’s books to record this transaction.

4. What economic event will cause Carnival to reduce its customer deposits liability? Is this an external or internal event?