Hospitality Legal Services, Inc., which provides contract services for caterers and their clients, was incorporated on July 1, 2008. During the first month of operations, the following transactions occurred:
1. Stockholders invested $10,000 in cash in exchange for shares of stock.
2. Paid $800 for July rent on office space.
3. Purchased office equipment on account, $3,000.
4. Provided legal services to clients for cash, $1,500 (use Service Revenue).
5. Borrowed $700 cash from a bank on a note payable.
6. Performed legal services for client on account, $2,000.
7. Paid monthly expenses: salaries $500; utilities $300; and telephone $100.
Instructions
(a) Prepare a tabular summary of the transactions.
(b) Prepare the income statement, retained earnings statement, and balance sheet at July 31 for Hospitality Legal Services, Inc.