Elizabeth Wong has strong problem-solving skills and loves to work with people. After becoming a Certified Human Resources Professional (CHRP) and working for several companies, she opened her own business, HR Solutions. She completed the following transactions during May 2017:
May    

1. 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 a report on hiring solutions for a client and collected $8,000 cash.
9. Completed a $16,000 project implementing a training program 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. Developed a performance review process for another client for $5,280 on credit. 

25. Paid wages for May totaling $34,000. 

31. Withdrew $5,000 cash from the business to take a trip to Paris in June. 

31. Purchased $1,600 of additional office supplies on credit.
31. Paid $1,400 for the month’s utility bill.

Required
1. Prepare 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); Elizabeth Wong, Capital (301); Elizabeth Wong, 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, 2017.
Analysis Component: Utilities Expense, Services Revenue, and Elizabeth Wong, Withdrawals are equity accounts. Explain why.