Ye Olde Book Store opened its doors for business on May 1. During May, the following transactions took place:
May 1 Linda Berrill began the business by depositing $42,000 in the new company’s bank account.
3 Issued check no. C001 to Remax Rentals for one month’s rent, $1,000.
4 Received a shipment of books from Chassman Books, Inc., invoice dated May 3, terms 5/10, n/60, FOB shipping point, $15,680.
May 5 Received a bill for freight from Menden Shippers for the previous day’s shipment, terms n/30, $790.
6 Received a shipment from Lakeside Books, invoice dated May 6, terms 2/10, n/30, FOB shipping point, $11,300.
7 Issued check no. C002 to Pappanopoulos Freight for transportation charges on the previous day’s shipment, $574.
8 Issued check no. C003 to Yun Chao Equipment Company for store equipment, $10,400.
9 Sold books to Midtown Center, terms 5/10, n/30, invoice no. 1001, $1,564.
10 Returned books to Chassman Books, Inc., for credit, $760.
11 Issued check no. C004 to WCAM for radio commercials, $235.
12 Issued check no. C005 to Chassman Books, Inc., for balance of amount owed less discount.
13 Cash sales for the first two weeks, $4,018. (For this problem, cash sales are recorded every two weeks, not daily as they are in actual practice.)
14 Issued check no. C006 to Lakeside Books, $6,000 less discount.
15 Signed a 90-day, 10 percent note for a bank loan and received $20,000 in cash.
15 Sold books to Steve Oahani, terms n/30, invoice no. 1002, $260.
16 Issued a credit memorandum to Midtown Center for returned books, $124.
17 Received full payment from Midtown Center of balance owed less discount.
18 Sold books to Missy Porter, terms n/30, invoice no. 1003, $194.
19 Received a shipment from Perspectives Publishing Company, invoice dated
May 18, terms 5/10, n/60, $4,604.
20 Returned additional books purchased on May 4 to Chassman Books, Inc., for credit at gross price, $1,436.
21 Sold books to Midtown Center, terms 5/10, n/30, invoice no. 1004, $1,634.
23 Received a shipment from Chassman Books, Inc., invoice dated May 19, terms 5/10, n/60, FOB shipping point, $2,374.
24 Issued check no. C007 to Menden Shippers for balance owed on account plus shipping charges of $194 on previous day’s shipment.
27 Cash sales for the second two weeks, $7,488.
29 Issued check no. C008 to Payroll for salaries for first four weeks of the month, $1,400.
30 Issued check no. C009 to WXAM for radio commercials, $235.
31 Cash sales for the last four days of the month, $554.

Required
1. Prepare a sales journal, a multicolumn purchases journal, a cash receipts journal, a cash payments journal, and a general journal. Use Page 1 for all journal references.
2. Open the following general ledger accounts: Cash (111), Accounts Receivable (112), Store Equipment (141), Accounts Payable (211), Notes Payable (212), Linda Berrill, Capital (311), Sales (411), Sales Discounts (412), Sales Returns and Allowances (413), Purchases (511), Purchases Discounts (512), Purchases Returns and Allowances (513), Freight In (514), Salaries Expense (611), Advertising Expense (612), and Rent Expense (613).
3. Open accounts receivable subsidiary ledger accounts for Midtown Center, Steve Oahani, and Missy Porter.
4. Open accounts payable subsidiary ledger accounts for Chassman Books, Inc.; Lakeside Books; Menden Shippers; and Perspectives Publishing Company.
5. Enter the transactions in the journals and post as appropriate.
6. Foot and crossfoot the journals, and make the end-of-month postings.
7. Prepare a trial balance of the general ledger and prove the control balances of Accounts Receivable and Accounts Payable by preparing schedules of accounts receivable and accounts payable.