Milo Clothing experienced the following events during Year 1, its first year of operation:

1. Acquired $16,500 cash from the issue of common stock.
2. Purchased inventory for $6,900 cash.
3. Sold inventory costing $4,140 for $7,038 cash.
4. Paid $700 for advertising expense.

Required

1. Record the general journal entries for the preceding transactions.
2. Post each of the entries to T-accounts.
3. Prepare a trial balance to prove the equality of debits and credits.