Vince Serrano started Serrano Carpet Installers, and during the first month of operations (January 2007) he completed the following selected transactions:

a. Serrano began the business with an investment of \(\$ 40,000\) cash and a van (automobile) valued at \(\$ 20,000\). The business gave Serrano owner's equity in the firm.

b. Paid \(\$ 32,000\) for equipment.

c. Purchased supplies on account, \(\$ 400\).

d. Paid employee's salary, \(\$ 1,300\).

e. Received \(\$ 800\) for a carpet installation job.

f. Received a \(\$ 500\) bill for advertising expense that will be paid in the near future.

g. Paid the account payable created in transaction (c).

h. Installed carpet for a hotel on account, \(\$ 3,300\).

i. Received cash on account, \(\$ 1,100\).

j. Paid the following cash expenses and made a single compound entry:

(1) Rent, \(\$ 1,000\).

(2) Insurance, \(\$ 600\).

k. Withdrew \(\$ 2,600\) for personal use.

Requirements 

1. Open the following four-column accounts: Cash; Accounts Receivable; Supplies; Equipment; Automobile; Accounts Payable; Vince Serrano, Capital; Vince Serrano, Withdrawals; Service Revenue; Salary Expense; Rent Expense; Advertising Expense; Insurance Expense.

2. Record the transactions in the journal. Use the letters to identify the transactions. 

3. Post to the accounts and keep a running balance for each account. 

4. Prepare the trial balance of Serrano Carpet Installers at January 31, 2007.