2 and Great Adventures Problem AP3-1 The following information applies to the questions displayed below.) Tony and Suzie graduate from college in May 2021 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayang. Upon developing a customer base, they'l hold their first adventure races. These races will involve four person teams that race from one checkpoint to the next using a combination of kayaking, mountain biking, orienteering and trail running. In the long run, they plan to sell outdoor gear and develop a ropes course for outdoor enthusiasts. On July 1, 2021, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of Incorporation state that the corporation will sell 36,000 shares of common stock for S1 cach. Each share of stock represents a unit of ownership. Tony and Suzie wil act as co-presidents of the company. The following transactions occur from July 1 through December 31. Jul. 1 Sell $10,000 of common stock to Suzi.. Jul. 1 Sell $10,000 of stock to Tony. Jul. Purchase one-year isurance policy for $5,040 5420 per noth) to cover injuries to participants during outdoor elinica. Jul. Pay legal fee of $1,100 xrociated with incorporation Jul. Purchase of tien wupplies of $1,700 on account. Jul. 1 Pay for advertising of $320 to local savapaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $4D on the day of the clinic. Jul Purchase 10 mountain bikus, paying $19.40 cash. Jul 15 on the day of the clinic, Great Adventures receives cash of $2,000 from 50 bikers. Tony conducts the mountain bikin elinie Jul. 22 Because of the Hus of the first stain biking clinic, Sony holds another ain biking alinie the company receive $2,390. Jul. 24 Pay $740 to local radio station for derestining to appear immediately. A kayaking clinic will be held on haguat 10, and attendees can pay $120 in drance or $170 on the day of the clinic. Jul. 3. Great Adventure receive cash of $4,000 in advance from 40 kayakers for the upcoming kayak clinic. Aug. 1 Great Adventurus obtaina 542,000 low-intezet lors to the company from the city council, which has recently pued an initiative encouraging business development related to outdoor activities. Thu loan in de in three years, and an interest is duu auch year on July 31. Aug. 4 The company purchase kayaka, paying $10,200 cash. Avag. 10 venty additional kayakuru pay $3,400 (5170 each), in addition to the 54,000 that was paid in advance - July 3, on the day of the clinie. Toey conduct the first kayak elinie. Sony candecta secoed kayak clinic, and the company receives $12,00 cash. Anag. 24 ottice supplies of $1,700 purchased on July are paid in fall. Sep. 1 to provide better storage bikes and kayaka when not in use, the company sents a storage ahed for see year, paying $3,30 $200 per month) is advance. Sep. 21 Sony candectacock-climbing clinic. The company receives $24,500 C Oct. 17 Sony candects an orienteering clinic. Participants practice how to understand topographical rap. read an altites, we cop, and orient through heavily veeded area. The company receive $10,000 ca. Dec. 1 Sony decides to hold the company's first adventure race on December 15. Tour-paraon tax vill ruce from checkpoint to checkpoint using combination of mountain biking, kayaking, orientering, trail running, ed sock-climbing skills. The first tea is cach category to complete all checkpointa in order wira. The entry to tor each us $490. s to help organizu and promote the rew, Soay hire his college roommate, Victor. Victor will be paid 540 in salary for much to that coupates in the race is alary will be paid atter the race. Dec. The company pays $1,000 to purchase permit from a state park where the race will be held. The amount is recorded a sellaneous expense. Dec. 12 The company purchases racing supplies for $2,300 account dus in 30 days. Supplies include trophies for the top-tinishing teams i cach category, promotional shirta, anuck food and drinks for and field markers to prepare the FRECUEN. Dec. 15 The company receives $27,600 cash tro total of torty teams, and the race is held. Dec. 16 The company pays Victor's malery of $2,400. Dec. 31 The company pays dividend of 54,300 (52,150 to Tony and $2,250 to Surse). Dec. 31 Daing his personal money, Tony purchases diamond ring for $3,600. Toy surprise Suzie by preparing that they get married. Suzie accepts and they get married! The following information relates to year-end adjusting entries as of December 31, 2021. a Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8.700. b. Six months of the one year Insurance policy purchased on July 1 has expired. Four months of the one year rental agreement purchased on September 1 has expired. d. Of the $1,700 of office supplies purchased on July 4, S310 remains e Interest expense on the $42.000 loan obtained from the city council on August 1 should be recorded t Of the $2,300 of racing supplies purchased on December 12, $150 remains. Suzle calculates that the company owes $13,400 in income taxes. Aug. 13 Dec. Great Adventures Problem AP3-1 Part 2 2. Record adjusting entries as of December 31, 2021. (if no entry is required for a transaction/event, select "No joumal entry required in the first account field.) View transactions Journal entry worksheet 1 2 3 4 > Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,700. Note: Enter dubits before credits Date Dec 31, 2021 General Journal Debit Credit Record entry Clear entry View general journal 3. Post transactions from July 1 through December 31 and adjusting entries on December 31 to T-accounts. Prepaid insurance Beg Bal 18,550 Beg Bal End. Bal End. Bal Prepaid Rent Supplies (Office) Beg Bal Beg Bal End. Bal End Bal Supplies (Racing) Equipment Bikes Beg Bal Beg Bal End. Bal End Bal Equipment (Kayaks Accumulated Depreciation Beg Bal Beg Bal End Bal End Bal Accounts Payable Deferred Ravenue Beg Bal Beg Bal End Bal End Dat Interest Payable Income Tax Payable Beg Bal Beg Bal End. Bal End Ral Notes Payable Common Stock 35,000 Beg Bal Beg Bal End. Bal End Bal Dividends Service Revenue Cine 4,350 Beg Bal | Bap Bal. End. Bal End. Bal Service Revenue Racing Advertising Expense Beg Bal Beg Bal End. Bal End. Bal Legal Fees Expense Miscellaneous Expense Beg Bal Beg Bal End Bal End. Bal Salaries Expense Depreciation Expanse Beg Bal Beg Bal End. Bal End. Bal Insurance Expense Rent Expense Beg Bal Beg Bal End. Bal End Bal Supplies Expense (Office Supplies Expense Racing Beg Bal Beg Bal End. Bal End. Bal Interest Expense Income Tax Expense Beg Bal Beg Bal End. Bal End. Bal