Question

During the first month of operations (August 2018​), Starr Music ServicesCorporation completed the following selected​ transactions:

a.	The business received cash of $54,000 and a building with a fair value of $105,000. The corporation issued common stock to the stockholders.
b.	Borrowed $63,000 from the​ bank; signed a note payable.
c.	Paid $37,000 for music equipment.
d.	Purchased supplies on​ account, $270.
e.	Paid​ employees' salaries, $5,900.
f.	Received $4,200 for music services performed for customers.
g.	Performed services for customers on​ account, $13,200.
h.	Paid $140 of the account payable created in transaction d.
i.	Received​ a(n) $500 bill for utilities expense that will be paid in the near future.
j.	Received cash on​ account, $1,400.
k.	Paid the following cash​ expenses: (1)​ rent, $1,000​; ​(2) advertising, $400.

Requirement 1. Record each transaction directly in the​ T-accounts without using a journal. Use the letters to identify the transactions. Determine the ending balance in each account.

Enter each transaction. Then calculate the ending balance for each account by selecting​ "Bal" on the appropriate side of the account and entering the account balance. ​(For transaction​ (k), enter the credit as one​ posting.)

Requirement 2.  Prepare the trial balance of

Starr Music ServicesStarr Music Services

Corporation at

AugustAugust

3131​,

20182018.

Review the ending balances of the T-accounts prepared in the previous step.

Requirement 2. Prepare the trail balance of Starr Music Services Corperation at August 31, 2018

Answer 1

Date Date Credit Date Starr Music Services Corporation T Accounts Date Debit Date Credit Cash Op bal $ - $ 54,000 C. $ 37,000 $ 63,000 e. $ 5,900 $ 4,200 h. $ 140 $ 1,400 k. $ 1,400 Debit Date Credit Accounts Receivable $ - $ 13,200 j. $ 1,400 Debit Date Supplies $ - $ 270 Debit Date Building $ . $ 105,000 Op bal Op bal g Op bal d. Bal. Bal. Bal. Bal $ 78,160 Equipment $- $ 37,000 $ 11,800 Accounts Payable Op bal $ 140 d. $ 270 Notes Payable Op bal $ 105,000 Common Stock Op bal Op bal $ $ $ . 270 500 $- $ 63,000 $ . $ 159,000 Bal. $ 630 $ 63,000 $ 159,000 $ 37,000 Service Revenue Bal. Salaries expense $ 5,900 Bal. Rent expense $ 1,000 Bal. Advertising expense $ 400 $ 4,200 $ 13,200 Bal. $ 17,400 Bal. $ 5,900 Bal. $ 1,000 $ 400 Utilities expense $ 500 i. Bal. $ 500

Starr Music Services Corporati Trial Balance Account Names Debit Credit Cash 78,160 Accounts Receivable 11,800 Supplies 270 Building 105,000 Equipment 37,000 Accounts Payable 630 Notes Payable 63,000 Common Stock 159,000 Service Revenue 17,400 Salaries expense 5,900 Rent expense 1,000 Advertising expense 400 Utilities expense 500 Totals 240,030 240,030

For better understanding, journal entries are given below:

Credit Starr Music Services Corporation Journal entries Date Account a. Cash Building Common Stock Debit $ 54,000 $ 105,000 $ 159,000 b. Cash $ 63,000 Notes Payable $ 63,000 $ 37,000 Equipment Cash $ 37,000 d. $ 270 Supplies Accounts Payable $ 270 e. $ 5,900 Salaries expense Cash $ 5,900 f. $ 4,200 Cash Service Revenue $ 4,200 $ 13,200 Accounts Receivable Service Revenue $ 13,200 h. $ 140 Accounts Payable Cash $ 140 $ 500 Utilities expense Accounts Payable $ 500 $ 1,400 Cash Accounts Receivable $ 1,400 Rent expense Advertising expense Cash $ $ 1,000 400 $ 1,400