he transactions completed by PS Music during June 2012 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business's operations: July 1. Pat Sharpe made an additional investment in PS Music by depositing $4,000 in PS Music's checking account. 1. Instead of continuing to share office space with a local real estate agency, Pat decided to rent office space near a local music store. Paid rent for July, $1,800. 1. Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received $1,250 on account. 3. On behalf of PS Music, Pat signed a contract with a local radio station, WHBD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600. Any additional hours beyond 80 will be billed to WHBD at $40 per hour. In accordance with the contract, Pat received $7,200 from WHBD as an advance payment for the first two months. 3. Paid $250 on account. 4. Paid an attorney $800 for reviewing the July 3rd contract with WHBD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from One-Stop Office Mart, $6,000. 8. Paid for a newspaper advertisement, $200. 11. Received $900 for serving as a disc jockey for a party. 13. Paid $600 to a local audio electronics store for rental of digital recording equipment. 14. Paid wages of $1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal. 16. Received $2,100 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, $1,080. 21. Paid $620 to Upload 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 PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 2012. 27. Paid electric bill, $760. 28. Paid wages of $1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, $370. 30. Served as a disc jockey for a charity ball for $1,800. Received $400, with the remainder due on August 9, 2012. 31. Received $2,800 for serving as a disc jockey for a party. 31. Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Withdrew $1,500 cash from PS Music for personal use. PS Music's chart of accounts and the balance of accounts as of July 1, 2012 (all normal balances), are as follows: 11 Cash 5,310 41 Fees Earned 6,650 12 Accounts Receivable 1,250 50 Wages Expense 400 14 Supplies 170 51 Office Rent Expense 750 15 Prepaid Insurance - 52 Equipment Rent Expense 700 17 Office Equipment - 53 Utilities Expense 300 21 Accounts Payable 250 54 Music Expense 1,590 23 Unearned Revenue - 55 Advertising Expense 450 31 Pat Sharpe, Capital 5,000 56 Supplies Expense 180 32 Pat Sharpe, Drawing 500 59 Miscellaneous Expense 300 Instructions 1. Enter the July 1, 2012, account balances in the appropriate balance column of a four-column 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.)