P2-70B (Learning Objectives 4, 6: Analyze the impact of business transactions on accounts; construct and use a trial balance) During the first month of operations (February 2012), Starr Entertainment Corporation completed the following selected transactions:

 

a.    The business received cash of $19,000 and a building valued at $53,000. The corporation issued common stock to the stockholders.

 

b.   Borrowed $41,100 from the bank; signed a note payable.

 

c.    Paid $37,000 for music equipment.

 

d.   Purchased supplies on account, $300.

 

e.    Paid employees’ salaries, $2,000.

 

f.     Received $1,600 for music service performed for customers.

 

g.    Performed service for customers on account, $2,900.

 

h.   Paid $200 of the account payable created in Transaction d.

 

i.     Received a $900 bill for utilities expense that will be paid in the near future.

 

j.     Received cash on account, $1,100.

 

k.   Paid the following cash expenses: (1) rent, $1,000; (2) advertising, $800.

 

â–¶ Requirements

 

1. Record each transaction directly in the T-accounts without using a journal. Use the letters to identify the transactions.

 

2. Prepare the trial balance of Starr Entertainment Corporation at February 29, 2012.