Sequel Theatre, owned by Nadia Wood, is unique as it shows only movies that are part of a theme with sequels. As at April $30,2024,$ the ledger of Sequel Theatre showed the following: Cash $$18,900,$ Land $$75,000,$ Buildings $$69,800,$ Equipment $$17,000,$ Accounts Payable $$4,990,$ Mortgage Payable $$106,300,$ and N$.$ Wood, Capital $$69,410.$ In May, the following events and transaction occurred:

May

$1$

Rented the first four Harry Potter movies, to be shown in the first two weeks of May. The film rental was $$25,000.$ Of that amount, $$10,784$ was paid in cash and the balance will be paid on May. $10.$

$2$

Hired M$.$ Brewer to operate the concession stand. Brewer agreed to pay Sequel Theatre $15\%$ of gross concession receipts, on the last day of each month, for the right to operate the concession stand.

$7$

Paid advertising expenses, $$1,090.$

$10$

Received $$35,940$ cash from customers for admission.

$10$

Paid the balance due from the May $1$ movie rental transaction.

$15$

Received the final four Harry Potter movies to be shown in the last two weeks of May. The film rental cost was $$28,600.$ Paid $$14,300$ cash and the balance will be paid on June $1.$

$25$

Paid the accounts payable owing at the end of April.

$30$

Paid salaries of $$6,230.$

$31$

Received statement from Brewer showing gross receipts from concessions of $$27,700$ and the balance due to Sequel Theatre of $$4,155($$$27,700\backslash$times $15\%)$ for May. Brewer paid $$2,370$ of the balance due and will pay the ret on June $5.$

$31$

Received $$41,800$ cash from admissions.

$31$

Made a $$1,790$ mortgage payment. Of this amount, $$1,185$ is a principal payment, and $$605$ is interest on the mortgage.

In addition to the accounts identified above, Sequel Theatre$$s ledger includes the following: Accounts Receivable; Admission Revenue; Concession Revenue; Advertising Expense; Film Rental Expense; Interest Expense: and Salaries Expense.

Instructions

Journalize the May transactions.

Enter the beginning balances in the ledger as at May $1.$ Use the ledger format shown in Illustration $2\mathrm{.}18$ of your textbook.

Post the May journal entries to the ledger.

Prepare a trial balance at the end of May.

A friend of your is considering buying Sequel Theatre from the current owner. Using the information in the trial balance, comment on whether or not this may be a sound company for your fried to purchase.y