Derek Scoffin owns and operates YH Curling School on evenings and weekends. The company had the following balances in its general ledger at January 31, 2024: Cash $2,100, Accounts Receivable $720, Equipment $12,400, Accounts Payable $1,470, and D. Scoffin, Capital $13,750. The following events and transactions occurred during February 2024.

Feb. 1 Received and paid a $430 advertising bill.

2 Paid the YH Curling Club $1,050 rent for use of the ice for lessons during the first two weeks of February.

3 Collected $4,240 cash for February’s curling lessons.

4 Collected all of the accounts receivable at January 31 in cash.

6 Paid $970 of the accounts payable at January 31.

14 Paid his part-time assistant $400.

15 Paid the YH Curling Club $1,050 rent for use of the ice for lessons during the last two weeks of February.

23 Provided $1,475 of coaching services to curlers preparing for a tournament. The curlers
will pay him on March 2. 26 Paid $185 cash for the telephone bill for February. 27 Received $2,830 cash for curling lessons in March. 27 Withdrew $575 cash. Used the cash to pay his Visa bill. 29 Paid his part-time assistant $400. 29 Paid the YH Curling Club $1,050 rent for use of the ice for lessons during the first two weeks of March.

Instructions

a. Prepare journal entries to record each of YH Curling School’s February transactions.

b. Using T accounts, open the required ledger accounts for the transactions that were journalized, and enter the January 31, 2024, balances.

c. Post the journal entries to the accounts in the ledger.

d. Prepare a trial balance as at February 29, 2024.

e. Prepare an income statement for YH Curling School for the month.

f. Prepare a statement of owner’s equity for the month.

g. Prepare a balance sheet as at February 29, 2024.

Taking It Further

Are the February payments to YH Curling Club for ice rental an asset, a reduction of a liability, or an expense? Explain.