The transactions completed by Dancin Music during April 2008 were described at the end of Chapter 1 1 answer below »

The transactions completed by Dancin Music during April 2008 were described at the end of Chapter 1. The following transactions were completed during May, the second month of the business’s operations:

May 1. Kris Payne made an additional investment in Dancin Music by depositing $2,500 in Dancin Music’s checking account.

1. Instead of continuing to share office space with a local real estate agency, Kris decided to rent office space near a local music store. Paid rent for May, $1,600.

1. Paid a premium of $3,360 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period.

2. Received $1,350 on account.

3. On behalf of Dancin Music, Kris signed a contract with a local radio station, KPRG, to provide guest spots for the next three months. The contract requires Dancin Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $2,400. Any additional hours beyond 80 will be billed to KPRG at $40 per hour. In accordance with the contract, Kris received $4,800 from KPRG as an advance payment for the first two months.

3. Paid $250 on account.

4. Paid an attorney $300 for reviewing the May 3rd contract with KPRG. (Record as Miscellaneous Expense.)

5. Purchased office equipment on account from One-Stop Office Mart, $5,000.

8. Paid for a newspaper advertisement, $180.

11. Received $750 for serving as a disc jockey for a college fraternity party.

13. Paid $500 to a local audio electronics store for rental of digital recording equipment.

14. Paid wages of $1,000 to receptionist and part-time assistant.

16. Received $1,500 for serving as a disc jockey for a wedding reception.

18. Purchased supplies on account, $750.

21. Paid $325 to Rocket Music for use of its current music demos in making various music sets.

22. Paid $800 to a local radio station to advertise the services of Dancin Music twice daily for the remainder of May.

23. Served as disc jockey for a party for $2,500. Received $750, with the remainder due June 4, 2008.

27. Paid electric bill, $560.

28. Paid wages of $1,000 to receptionist and part-time assistant.

29. Paid miscellaneous expenses, $150.

30. Served as a disc jockey for a charity ball for $1,500. Received $400, with the remainder due on June 9, 2008.

31. Received $2,800 for serving as a disc jockey for a party.

31. Paid $900 royalties (music expense) to Federated Clearing for use of various artists’ music during May.

31. Withdrew $1,000 cash from Dancin Music for personal use.

Dancin Music’s chart of accounts and the balance of accounts as of May 1, 2008 (all normal balances), are as follows

11

Cash

$ 9,160

41

Fees Earned

$5,700

12

Accounts Receivable

1,350

50

Wages Expense

400

14

Supplies

170

51

Office Rent Expense

1,000

15

Prepaid Insurance

52

Equipment Rent Expense

800

17

Office Equipment

53

Utilities Expense

350

21

Accounts Payable

250

54

Music Expense

1,340

23

Unearned Revenue

55

Advertising Expense

750

31

Kris Payne, Capital

10,000

56

Supplies Expense

180

32

Kris Payne, Drawing

300

59

Miscellaneous Expense

150

Instructions

1. Enter the May 1, 2008, account balances in the appropriate balance column of a fourcolumn account. Write Balance in the Item column, and place a check mark (??) in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.)

2. Analyze and journalize each transaction in a two-column journal, omitting journal entry explanations.

3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting.

4. Prepare an unadjusted trial balance as of May 31, 2008.