On July 31, 2017, the general ledger of Hills Legal Services Inc. showed the following balances: Cash $4,000, Accounts Receivable $1,500, Supplies $500, Equipment $5,000, Accounts Payable $4,100, Common Stock $3,500, and Retained Earnings $3,400. During August, the following transactions occurred. Aug.

3 Collected $1,200 of accounts receivable due from customers.

5 Received $1,300 cash for issuing common stock to new investors.

6 Paid $2,700 cash on accounts payable.

7 Performed legal services of $6,500, of which $3,000 was collected in cash and the remainder was due on account.

12 Purchased additional equipment for $1,200, paying $400 in cash and the balance on account. 1

4 Paid salaries $3,500, rent $900, and advertising expenses $275 for the month of August.

18 Collected the balance for the services performed on August 7.

20 Paid cash dividend of $500 to stockholders.

24 Billed a client $1,000 for legal services performed.

26 Received $2,000 from Laurentian Bank; the money was borrowed on a bank note payable that is due in 6 months.

27 Agreed to perform legal services for a client in September for $4,500. The client will pay the amount owing after the services have been performed.

28 Received the utility bill for the month of August in the amount of $275; it is not due until September 15.

31 Paid income tax for the month $500

Instructions (a) Using T-accounts, enter the beginning balances to the ledger.

(b) Journalize the August transactions.

(c) Post the August journal entries to the ledger.

(d) Prepare a trial balance on August 31, 2017.