Final answer:
To prepare the trial balance, we need to record the transaction and then list the accounts and their balances. In this case, K. Spade invested $19,750 cash in the company in exchange for common stock.
Step-by-step explanation:
To prepare the trial balance for the company, we need to list all the accounts and their balances. In this case, we have one transaction where K. Spade, the owner, invested $19,750 cash in the company in exchange for common stock. We would record this as follows:
- Common Stock: $19,750 (credit)
- Cash: $19,750 (debit)
After recording this transaction, we can then prepare the trial balance by listing the accounts and their respective debit or credit balances. The trial balance serves as a way to ensure that the total debits equal the total credits. In this case, the trial balance would look like this:
AccountDebitCreditCommon Stock-$19,750Cash$19,750-