Santa Ana Services was formed on May 1, 2014. The following transactions took place during the first month.

Transactions on May 1:

1. Don Humes invested $40,000 cash in the company, as its sole owner.

2. Hired two employees to work in the warehouse. They will each be paid a salary of $3,050 per month.

3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first year.

4. Purchased furniture and equipment costing $30,000. A cash payment of $10,000 was made immediately; the remainder will be paid in 6 months.

5. Paid $1,800 cash for a one-year insurance policy on the furniture and equipment.

Transactions during the remainder of the month:

6. Purchased basic office supplies for $500 cash.

7. Purchased more office supplies for $1,500 on account.

8. Total revenues earned were $20,000—$8,000 cash and $12,000 on account.

9. Paid $400 to suppliers for accounts payable due.

10. Received $3,000 from customers in payment of accounts receivable.

11. Received utility bills in the amount of $350, to be paid next month.

12. Paid the monthly salaries of the two employees, totalling $6,100.

Instructions

(a) Prepare journal entries to record each of the events listed. (Omit explanations.)

(b) Post the journal entries to T-accounts.

(c) Prepare a trial balance as of May 31, 2014.