Karla Tanner opened a Web consulting business called Linkworks and…
Karla Tanner opened a Web consulting business called Linkworks and completed the following transactions in its first month of operations.
| April 1 | Tanner invested $110,000 cash along with office equipment valued at $26,400 in the company. |
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| April 2 | The company prepaid $7,200 cash for 12 months’ rent for office space. Hint: Debit Prepaid Rent for $7,200. |
| April 3 | The company made credit purchases for $13,200 in office equipment and $2,640 in office supplies. Payment is due within 10 days. |
| April 6 | The company completed services for a client and immediately received $2,000 cash. |
| April 9 | The company completed a $8,800 project for a client, who must pay within 30 days. |
| April 13 | The company paid $15,840 cash to settle the account payable created on April 3. |
| April 19 | The company paid $6,000 cash for the premium on a 12-month prepaid insurance policy. Hint: Debit Prepaid Insurance for $6,000. |
| April 22 | The company received $7,040 cash as partial payment for the work completed on April 9. |
| April 25 | The company completed work for another client for $2,640 on credit. |
| April 28 | Tanner withdrew $6,200 cash from the company for personal use. |
| April 29 | The company purchased $880 of additional office supplies on credit. |
| April 30 | The company paid $700 cash for this month’s utility bill. |
Required:
- 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).
- Post the journal entries from part 1 to the ledger accounts.
- Make a trial balance as of April 30.
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