Part 1.

Karla Tanner opens a Web consulting business called Linkworks and completes the following transactions in its first month of operations.

 

April 1

Tanner invests $150,000 cash along with office equipment valued at $36,000 in the company in exchange for common stock.

2

The company prepaid $7,200 cash for twelve months' rent for office space. (Hint: Debit Prepaid Rent for $7,200.)

3

The company made credit purchases for $18,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.

6 The company completed services for a client and immediately received $2,000 cash.

9 The company completed a $12,000 project for a client, who must pay within 30 days.

13 The company paid $21,600 cash to settle the account payable created on April 3.

19

The company paid $6,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $6,000.)

22

The company received $9,600 cash as partial payment for the work completed on April 9.

25 The company completed work for another client for $2,640 on credit.

28 The company paid $6,200 cash in dividends.

29 The company purchased $1,200 of additional office supplies on credit.

30 The company paid $700 cash for this month's utility bill.

 

Required:

1.

Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307); Dividends (319); Services Revenue (403); and Utilities Expense (690).

Part 2. Form  ledger accounts for the account titles referred in part 1 and post the journal entries from part 1 to the ledger accounts.

Part 3. Prepare a trial balance.