Chapter 3, Problem 81.2C

To determine

To prepare: T accounts and to post the journal entries of the February month.

Introduction: Journal entries in respect of each account is posted to its respective T account. T accounts are ledger accounts prepared to ascertain the transactions entered in respect of each account and to obtain its closing balance thereafter.

Explanation of Solution

Preparation of cash account in general ledger:

Cash
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				14,100
February, 1	Unearned sales revenue		28,400		42,500
February, 1	Rent expense			800	41,700
February, 2	Accounts payable			1,500	40,200
February, 6	Prepaid rent			30,150	10,050
February, 9	Accounts receivable		325		10,375
February, 15	Sales revenue		3,400		13,775
February, 15	Artist fee expense			9,000	4,775
February, 20	Unearned sales revenue		10,125		14,900
February, 21	Sales revenue		5,100		20,000
February, 21	Artist fee expense			12,620	7,380

   Table (1)

Preparation of accounts receivable account in general ledger:

Accounts receivable
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				400
February, 9	Cash			325	75

   Table (2)

Preparation of supplies account in general ledger:

Supplies
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				2,500
February, 12	Accounts payable		475		2,975

   Table (3)

Preparation of prepaid insurance account in general ledger:

Prepaid insurance
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				3,600

   Table (4)

Preparation of prepaid rent account in general ledger:

Prepaid rent
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				10,000
February, 6	Cash		30,150		40,150

   Table (5)

Preparation of equipment account in general ledger:

Equipment
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				7,000

   Table (6)

Preparation of accounts payable account in general ledger:

Accounts payable
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				$\left(1,500\right)$
February, 2	Cash		1,500		0
February, 12	Supplies			475	$\left(475\right)$

   Table (7)

Preparation of unearned sales revenue account in general ledger:

Unearned sales revenue
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				$\left(3,800\right)$
February, 1	Cash			28,400	$\left(32,200\right)$
February, 20	Cash			10,125	$\left(42,325\right)$

   Table (8)

Preparation of notes payable account in general ledger:

Notes payable
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				$\left(25,000\right)$

   Table (9)

Preparation of common stock account in general ledger:

Common stock
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				$\left(16,000\right)$

   Table (10)

Preparation of sales revenue account in general ledger:

Sales revenue
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				$\left(1,000\right)$
February, 15	Cash			3,400	$\left(4,400\right)$
February, 21	Cash			5,100	$\left(9,500\right)$

   Table (11)

Preparation of artist fee expense account in general ledger:

Artist fee expense
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				800
February, 15	Cash		9,000		9,800
February, 21	Cash		12,620		22,420

   Table (12)

Preparation of rent expense account in general ledger:

Rent expense
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				800
February, 1	Cash		800		1,600

   Table (13)

Preparation of salaries expense account in general ledger:

Salaries expense
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				2,400

   Table (14)

Preparation of advertising expense account in general ledger:

Advertising expense
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				4,500

   Table (15)

Preparation of legal expense account in general ledger:

Legal expense
Date	Particular	Post Ref.	Debit($)	Credit($)	Balance($)
February, 1	Balance				1,200

   Table (16)