Question

Problem 2-1A Preparing and posting journal entries; preparing a trial balance LO C3, C4, A1, P1, P2

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

April		1		Tanner invested $80,000 cash along with office equipment valued at $26,000 in the company.
		2		The company prepaid $9,000 cash for 12 months’ rent for office space. Hint: Debit Prepaid Rent for $9,000.
		3		The company made credit purchases for $8,000 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 $4,000 cash.
		9		The company completed a $6,000 project for a client, who must pay within 30 days.
		13		The company paid $11,600 cash to settle the account payable created on April 3.
		19		The company paid $2,400 cash for the premium on a 12-month insurance policy. Hint: Debit Prepaid Insurance for $2,400.
		22		The company received $4,400 cash as partial payment for the work completed on April 9.
		25		The company completed work for another client for $2,890 on credit.
		28		Tanner withdrew $5,500 cash from the company for personal use.
		29		The company purchased $600 of additional office supplies on credit.
		30		The company paid $435 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); K. Tanner, Capital (301); K. Tanner, Withdrawals (302); Services Revenue (403); and Utilities Expense (690).
2. Post the journal entries from part 1 to the ledger accounts.
3. Prepare a trial balance as of April 30.

Answer 1