Reference no: EM131528118

Question: Lummus Management Services opens for business and completes these transactions in September.

Sept. 1 Rhonda Lummus, the owner, invests $28,000 cash along with office equipment valued at $25,000 in the company.

2 The company prepaid $10,500 cash for 12 months' rent for office space. (Hint: Debit Prepaid Rent for $10,500.)

4 The company made credit purchases for $9,000 in office equipment and $1,200 in office supplies. Payment is due within 10 days.

8 The company completed work for a client and immediately received $2,600 cash.

12 The company completed a $13,400 project for a client, who must pay within 30 days.

13 The company paid $10,200 cash to settle the payable created on September 4.

19 The company paid $5,200 cash for the premium on an 18-month insurance policy. (Hint: Debit Prepaid Insurance for $5,200.)

22 The company received $7,800 cash as partial payment for the work completed on September 12.

24 The company completed work for another client for $1,900 on credit.

28 Lummus withdrew $5,300 cash from the company for personal use.

29 The company purchased $1,700 of additional office supplies on credit.

30 The company paid $460 cash for this month's utility bill.

Required: 1. Prepare general journal entries to record these transactions (use account titles listed in part 2).

2. Open the following ledger accounts-their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); R. Lummus, Capital (301); R. Lummus, Withdrawals (302); Service Fees Earned (401); and Utilities Expense (690). Post journal entries from part 1 to the ledger accounts and enter the balance after each posting.

3. Prepare a trial balance as of the end of September.