On February 28, 2018, 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 transactions occurred:

Mar. 1Received 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 was on account. (Hint: Star Theatre uses the account Rent Expense to record film rentals).

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.

12 Paid balance due on the movies rented on March 1.

13 Paid the accounts payable owing at the end of February.

15 Received $25,500 from customers for admissions for the first half of the month. (Hint: Star Theatre uses the account Fees Earned to record revenue from admissions.)

19 Paid advertising expenses, $950.

20 Received the movies ordered on March 5 and paid rental fee of $3,000 ($300 × 10 nights).

23 Paid salaries of $4,200.

26 Paid $1,250 of the balance due on the mortgage, as well as $750 of interest on the mortgage.

28 Paid $3,000 for the monthly income tax instalment.

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 × 15%) for March. Brewer paid half of the balance due and will remit the remainder on April 5.

31 Received $25,800 from customers for admissions for the past two weeks.

Instructions

(a) Journalize the March transactions.

(b) Set up T accounts, enter the beginning balances in the ledger at February 28, and post the March journal entries to the general ledger.

(c) Prepare a trial balance at March 31.