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Karla Tanner opens a web consulting business called Linkworks and completes the following transactions in the first month of operations.
April 1: Tanner invests $80,000 cash along with office equipment valued at 26,000 in the company.
April 2: The company prepaid $9,000 cash for twelve months’ rent for office space. (Hint: Debt Prepaid Rent for $9,000).
April 3: The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
April 6: The company completed services for a client and immediately received $4,000 cash.
April 9: The company completed a $60,000 project for a client, who must pay within 30 days.
April 13: The company paid $11,600 cash to settle the account payable created on April 3.
April 19: The company paid $2,400 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $2,400).
April 22: The company received 4,400 cash as partial payment for the work completed on April 9.
April 25: The company completed work for another client for 2,890 on credit.
April 28: Tanner withdrew $5,500 cash from the company for personal use.
April 29: The company purchased $600 of additional office supplies on credit.
April 30: The company paid $435 cash for this month’s utility bill.
Required:
-
Prepare general
journal entries to record these transactions (use account titles listed in part 2). -
Open the following ledger accounts—their account numbers are in parenthesis (use the balance column format): Cash (101);
Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable; K. Tanner, Capital (301); K. Tanner, Withdrawals (302); Services Revenue (403); and Utilities Expense (690). -
Post journal entries from part 1 to the ledger accounts in part 2 and enter the balance after each posting. -
Prepare a
trial balance as of April 30.
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