On February 28, 2015, the Star Theatre, Inc.'s general ledger showed Cash $15,000; Land $85,000; Buildings $77,000; Equipment $20,000; Accounts Payable $12,000; Mortgage Payable $118,000; Common Shares $40,000; and Retained Earnings $27,000. During the month of March, the following events and transactions occurred:
Mar. 2 Received three movies to be shown during the first three weeks of March. The film rental was $27,000. Of that amount, $10,000 was paid in cash and the remainder will be paid on March 12.
2 Hired M. Brewer to operate concession stand. Brewer agrees to pay Star Theatre 15% of gross receipts, payable on the last day of each month, for the right to operate the concession stand.
5 Ordered three additional movies, to be shown the last 10 days of March. The film rental cost will be $300 per night.
9 Received $16,300 from customers for admissions.
12 Paid balance due on the movies rented on March 2.
13 Paid the accounts payable owing at the end of February.
19 Paid advertising expenses, $950.
20 Received $16,600 from customers for admissions.
23 Received the movies ordered on March 5 and paid rental fee of $3,000 ($300 × 10nights).
25 Received $18,400 from customers for admissions.
27 Paid salaries of $4,200.
30 Received statement from M. Brewer, showing gross concession receipts of $16,600, and the balance due to Star Theatre of $2,490 ($16,600 3 15%) for March. Brewer paid half of the balance due and will remit the remainder on April 5.
30 Paid $1,250 of the balance due on the mortgage, as well as $750 of interest on the mortgage.
30 Paid $3,000 for the monthly income tax installment.
Instructions
(a) Using T accounts, enter the beginning balances in the ledger as at February 28.
(b) Journalize the March transactions.
(c) Post the March journal entries to the ledger.
(d) Prepare a trial balance at March 31.