On March 31, 2018, the Lake Theatre Inc.'s general ledger showed Cash $6,000; Land $100,000; Buildings $80,000; Equipment $25,000; Accounts Payable $5,000; Mortgage Payable $125,000; Common Shares $50,000; and Retained Earnings $31,000. During the month of April, the following transactions occurred:

Apr. 2Paid film rental fee of $800 on a movie ordered last month. (Hint: Lake Theatre uses the account Rent Expense to record film rentals.)

3 Paid advertising expenses, $620.

5 Hired Thoms Limited to operate concession stand. Thoms agrees to pay the Lake Theatre 20% of gross concession receipts, payable monthly, for the right to operate the concession stand.

6 Ordered two additional films at $750 each.

15 Received $1,950 from customers for admissions for the first half of the month. (Hint: Lake Theatre uses the account Fees Earned to record revenue from admissions.)

16 Paid $2,000 of the balance due on the mortgage. Also paid $850 in interest on the mortgage.

17 Paid $2,800 of the accounts payable.

19 Received one of the films ordered on April 6 and was billed $750. The film will be shown in April.

20 Prepaid $700 rental fee on special film to be run in May. (Hint: Use the account Prepaid Rent to record rental fees paid in advance.)

26 Paid salaries, $2,900.

27 Paid $1,000 for the monthly income tax instalment.

30 Received statement from Thoms showing gross concession receipts of $5,600 and the balance due to Lake Theatre of $1,120 ($5,600 × 20%) for April. Thoms paid half of the balance due and will remit the remainder on May 4.

30 Received $7,300 from customers for admissions for the last half of the month

Instructions

(a) Journalize the April transactions.

(b) Set up T accounts, enter the beginning balances in the ledger at March 31, and post the April journal entries to the ledger.

(c) Prepare a trial balance at April 30.