Classic Theater Inc. was recently formed. All facilities were completed on March 31. On April 1, the ledger showed: Cash $6,300; Land $10,000; Buildings (concession stand, projection room, ticket booth, and screen) $8,000; Equipment $6,000; Accounts Payable $2,300; Mortgage Payable $8,000; and Common Stock $20,000. During April, the following events and transactions occurred.

Apr. 2 Paid film rental fee of $800 on first movie.

3 Ordered two additional films at $900 each.

9 Received $3,900 cash from admissions.

10 Paid $2,000 of mortgage payable and $1,000 of accounts payable. 11. Hired M. Norby to operate the concession stand. Norby agrees to pay Classic Theater 17% of gross receipts, payable monthly.

Paid advertising expenses $460.

Received one of the films ordered on April 3 and was billed $900. The film will be shown in April.

12 20 25 Received $3,000 cash from customers for admissions.

29 Paid salaries $1,900.

30 Received statement from M. Norby showing gross receipts of $1,000 and the balance due to Classic Theater of $170 for April. Norby paid half of the balance due and will remit the remainder on May 5.

30 Prepaid $1,000 rental fee on special film to be run in May.

In addition to the accounts identified above, the chart of accounts shows: Accounts Receivable, Prepaid Rentals, Admission Revenue, Concession Revenue, Advertising Expense, Film Rental Expense, Salaries Expense.

Instructions

(a) Enter the beginning balances in the ledger T accounts as of April 1.

(b) Journalize the April transactions, including explanations.

(c) Post the April journal entries to the ledger T accounts.

(d) Prepare a trial balance on April 30, 2007.