Reference no: EM132624451

Question - Preparing and posting journal entries; preparing a trial balance

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

April 1 Tanner invested $120,000 cash along with office equipment valued at $28,800 in the company in exchange for common stock. 2 The company prepaid $7,200 cash for 12 months' rent for office space. Hint: Debit Prepaid Rent for $7,200. 3 The company made credit purchases for $14,400 in office equipment and $2,880 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 $9,600 project for a client, who must pay within 30 days. 13 The company paid $17,280 cash to settle the account payable created on April 3. 19 The company paid $6,000 cash for the premium on a 12-month prepaid insurance policy. Hint: Debit Prepaid Insurance for $6,000. 22 The company received $7,680 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 a $6,200 cash dividend. 29 The company purchased $960 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).

2. Post the journal entries from part 1 to the ledger accounts.

3. Prepare a trial balance as of April 30.