The Palace Theater opened on April 1. All facilities were completed on March 31. At this time, the ledger showed No. 101 Cash $6,000, No. 140 Land $12,000, No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $8,000, No. 157 Equipment $6,000, No. 201 Accounts Payable $2,000, No. 275 Mortgage Payable $10,000, and No. 311 Common Stock $20,000. During April, the following events and transactions occurred. Apr. 2 Paid film rental of $800 on first movie.
3 Ordered two additional films at $950 each. 9 Received $1,800 cash from admissions.
10 Made $2,000 payment on mortgage and $1,000 for accounts payable due.
Apr. 11 Palace Theater contracted with Dever Company to operate the concession stand. Dever is to pay 18% of gross concession receipts (payable monthly) for the rental of the concession stand.
12 Paid advertising expenses $320.
20 Received one of the films ordered on April 3 and was billed $950. The film will
be shown in April.
25 Received $5,200 cash from admissions.
29 Paid salaries $1,600.
30 Received statement from Dever showing gross concession receipts of $1,000
and the balance due to The Palace Theater of $180 ($1,000 3 18%) for April.
Dever paid one-half of the balance due and will remit the remainder on May 5.
30 Prepaid $1,000 rental on special film to be run in May.
In addition to the accounts identified above, the chart of accounts shows No. 112 Accounts Receivable, No. 136 Prepaid Rent, No. 400 Service Revenue, No. 429 Rent Revenue, No. 610 Advertising Expense, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.
Instructions
(a) 1.Insertacheckmark(✓)inthe reference column of the ledger for the beginning balance.
(b) Journalize the April transactions.
(c) Post the April journal entries to the ledger. Assume that all entries are posted from
page 1 of the journal.
(d) Prepare a trial balance on April 30, 2015.

The Palace Theater

1. Opening Ledger:

Date        Accounts              Debit        Credit

101 Cash

April 1    Balance         ✓     $6,000

Date        Accounts            Debit        Credit

140 Land

April 1    Balance       ✓     $12,000

Date        Accounts            Debit        Credit

145 Buildings

April 1    Balance      ✓       $8,000

Date        Accounts            Debit        Credit

157 Equipment

April 1    Balance      ✓       $6,000

Date        Accounts            Debit        Credit

201 Accounts Payable

April 1    Balance        ✓                      $2,000

Date        Accounts            Debit        Credit

275 Mortgage Payable

April 1    Balance        ✓                       $10,000

Date        Accounts            Debit        Credit

311 Common Stock

April 1    Balance       ✓                        $20,000

2. Journal Entries:

Date        Accounts            Debit        Credit

April 2.    Prepaid Rent       $800

               Cash Account                      $800

To record the payment for film rental.

April 3    Cash Account    $1,800

              Service Revenue               $1,800

To record cash receipt from admissions.

April 10   Mortgage Payable $2,000

               Accounts Payable  $1,000

              Cash Account                     $3,000

To record payments on mortgage and accounts payable.

April 12  Advertising Expense $320

              Cash Account                     $320

To record payment for advertising expenses.

April 20  Prepaid Rent         $950

              Accounts Payable               $950

To record receipt of film on account.

April 25  Cash Account       $5,200

               Service Revenue                  $5,200

To record cash receipts from admissions.

April 29  Salaries               $1,600

              Cash Account                     $1,600

To record payment of salaries for the month.

April 30   Accounts Receivable $180

               Rent Revenue                        $180

To record rent revenue due.

April 30   Cash Account     $90

               Accounts Receivable          $90

To record the receipt from Dever for concessions.

April 30  Prepaid Rent     $1,000

              Cash Account                   $1,000

To record prepaid rental on special film.

3. 1. Ledger:

Date        Accounts              Debit        Credit

101 Cash

March 31 Balance         ✓     $6,000

April 2     Prepaid Rent                          $800

April 3     Service Revenue    1,800

April 10   Mortgage                              2,000

April 10   Accounts Payable                 1,000

April 12   Advertising expense              320

April 25  Service Revenue  5,200

April 29  Salaries                                 1,600

April 30  Accounts receivable 90

April 30  Prepaid Rental                     1,000

April 30  Balance c/d                       $6,370

Date        Accounts            Debit        Credit

140 Land

March 31 Balance       ✓     $12,000

Date        Accounts            Debit        Credit

145 Buildings

March 31 Balance      ✓       $8,000

Date        Accounts            Debit        Credit

157 Equipment

March 31 Balance      ✓       $6,000

Date        Accounts            Debit        Credit

201 Accounts Payable

March 31 Balance        ✓                      $2,000

April 10    Cash                 $1,000

April 20    Prepaid Rent                           950

April 30  Balance c/d       $1,950

Date        Accounts            Debit        Credit

275 Mortgage Payable

March 31 Balance        ✓                       $10,000

April 10    Cash                 $2,000

April 30  Balance c/d       $8,000

Date        Accounts            Debit        Credit

311 Common Stock

March 31 Balance       ✓                        $20,000

Date        Accounts            Debit        Credit

136 Prepaid Rent                        

April 30   Cash                    1,000

Date        Accounts             Debit        Credit

729 Rent Expense                      

April 2     Cash                    $800

April 20   Accounts Payable 950

April 30  Balance c/d                        $1,750

Date        Accounts            Debit        Credit

400 Service Revenue

April 3     Cash                                      $1,800

April 25   Cash                                      5,200

April 30  Balance c/d      $7,000

Date        Accounts            Debit        Credit

429 Rent Revenue

April 30   Accounts receivable               180

Date        Accounts            Debit        Credit

112 Accounts Receivable

April 30   Concessions      $180

April 30   Cash                                    $90

April 30  Balance c/d                          $90

Date        Accounts            Debit        Credit

610 Advertising Expenses

April 12   Cash                   $320

Date        Accounts            Debit        Credit

726 Salaries Expenses

April 29  Cash                   $1,600

4. Trial Balance on April 30, 2015:

Accounts                          Debit        Credit

Cash                              $6,370

Land                               12,000

Buildings                         8,000

Equipment                      6,000

Accounts Payable                           $1,950

Mortgage Payable                            8,000

Common Stock                              20,000

Prepaid Rent                  1,000

Rent Expense                1,750

Service Revenue                             7,000

Rent Revenue                                     180

Accounts Receivable        90

Advertising                      320

Salaries                         1,600

Total                          $37,130     $37,130  

Explanation:

a) Data

Ledger Balances on March 31:

No. 101 Cash $6,000

No. 140 Land $12,000

No. 145 Buildings $8,000

No. 157 Equipment $6,000

No. 201 Accounts Payable $2,000

No. 275 Mortgage Payable $10,000

No. 311 Common Stock $20,000