Amy Tuck graduated from college with a law degree in June of the current year, and during July, she completed these transactions:

July 1 Began the practice of law by investing \(\$ 3,000\) in cash and law books acquired in college and having a \(\$ 1,200\) fair value.

1 Rented the furnished office of a lawyer who was retiring and paid the rent (expense) for July, \(\$ 725\).

2 Purchased law books costing \(\$ 1,125\) under an agreement calling for a \(\$ 150\) down payment and the balance in monthly installments. Paid the down payment and recorded the remaining \(\$ 975\) as an account payable.

5 Purchased office supplies on credit, \(\$ 70\).

6 Took out a liability insurance policy giving one year's protection and paid the premium (expense) for the month of July, \(\$ 50\).

8 Completed legal work for a client and immediately collected \(\$ 450\) for the work done.

12 Paid for the office supplies purchased on credit on July 5.

16 Completed legal work for Lincoln Bank on credit, \$1,275.

22 Amy Tuck wrote a \(\$ 30\) check on the bank account of the legal practice to pay her home telephone bill.

24 Received \(\$ 1,275\) from Lincoln Bank for the work completed July 16.

26 Completed legal work for Royal Realty on credit, \(\$ 900\).

30 Paid the telephone bill of the legal practice, \(\$ 40\).

31 Paid the salary of the office secretary, \(\$ 1,350\).

31 Prepaid the rent on the office for August and September, \(\$ 1,450\).

31 Prepaid the liability insurance premium for the next 11 months, \(\$ 550\).

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1. Open the following accounts: Cash; Accounts Receivable; Prepaid Rent; Prepaid Insurance; Office Supplies; Law Library; Accounts Payable; Amy Tuck, Capital; Amy Tuck, Withdrawals; Legal Fees Earned; Rent Expense; Salaries Expense; Telephone Expense; and Insurance Expense.

2. Prepare general journal entries to record the transactions, post to the accounts, and prepare a trial balance titled Amy Tuck, Attorney.

3. Prepare an income statement for the month ended July 31.

4. Prepare a statement of changes in owner's equity for the month ended July 31.

5. Prepare a balance sheet dated July 31.