Sid Patel bid for and won a concession to rent bicycles in the local park during the summer. During the month of April, Patel completed the following transactions for his bicycle rental business:
Apr. 2 Began business by placing $14,400 in a business checking account in the name of the corporation in exchange for 14,400 shares of $1 par value common stock.
3 Purchased supplies on account for $300.
4 Purchased 10 bicycles for $5,000, paying $2,400 down and agreeing to pay the rest in 30 days.
5 Paid $5,800 in cash for a small shed to store the bicycles and to use for other operations.
8 Paid $800 in cash for shipping and installation costs (considered an addition to the cost of the shed) to place the shed at the park entrance.
9 Hired a part-time assistant to help out on weekends at $14 per hour.
10 Paid a maintenance person $150 to clean the grounds.
13 Received $1,940 in cash for rentals.
17 Paid $300 for the supplies purchased on April 3.
18 Paid a $110 repair bill on bicycles.
23 Billed a company $220 for bicycle rentals for an employee outing.
25 Paid the $200 fee for April to the Park District for the right to operate the bicycle concession.
27 Received $1,920 in cash for rentals.
29 Paid the assistant $480.
30 Declared and paid a dividend of $400.
Required
1. Prepare journal entries to record these transactions.
2. Set up the following T accounts and post all the journal entries: Cash; Accounts Receivable; Supplies; Shed; Bicycles; Accounts Payable; Common Stock; Dividends; Rental Revenue; Wages Expense; Maintenance Expense; Repair Expense; and Concession Fee Expense.
3. Prepare a trial balance for Patel Rentals, Inc., as of April 30, 2014.
4. Compare and contrast how the issues of recognition, valuation, and classification are settled in the transactions of April 3 and 10.