Jill Wahpoosywan opened a computer consulting business called Techno Wizards and completed the following transactions during May 2014:
May 1 Jill Wahpoosywan invested $75,000 in cash and office equipment that had a fair value of $48,000 in the business.
1 Prepaid $14,400 cash for three months' rent for an office.
2 Made credit purchases of office equipment for $24,000 and office supplies for $4,800.
6 Completed services for a client and immediately received $8,000 cash.
9 Completed a $16,000 project for a client, who will pay within 30 days.
10 Paid half of the account payable created on May 2.
19 Paid $7,500 cash for the annual premium on an insurance policy.
22 Received $12,800 as partial payment for the work completed on May 9.
25 Completed work for another client for $5,280 on credit.
25 Paid wages for May totalling $34,000.
31 Wahpoosywan withdrew $5,000 cash from the business for personal use.
31 Purchased $1,600 of additional office supplies on credit.
31 Paid $1,400 for the month's utility bill.
Required
1. Prepare General Journal entries to record the transactions. Use page 1 for the journal.
2. Set up the following accounts (use the balance column format or T-accounts): Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Jill Wahpoosywan, Capital (301); Jill Wahpoosywan, Withdrawals (302); Services Revenue (403); Wages Expense (623); and Utilities Expense (690).
3. Post the entries to the accounts and enter the balance after each posting.
4. Prepare a trial balance at May 31, 2014.
Analysis Component: Utilities Expense, Services Revenue, and Jill Wahpoosywan, Withdrawals are equity accounts. Explain why.