Big City Music You love music and have been told you have a great ear finding talent not to mention you have had some success making your own music! You have decided to start your own record agency, Big City Music to coincide with the release of a new single you recently recorded. Big City Music makes vinyl records for sale in local music shops. The following transactions occurred during the month of January the companys first month of operations. 1. January 1, The company issued $100 of Class A shares to you, the sole shareholder. You paid right away. 2. January 1, the company purchased liability insurance for the entire year (January 1- December 31). The cost was $1,200 for the year and the company paid right away. 3. January 1, the company received a loan from the Royal Bank of Canada (RBC) for operating use in the amount of $250,000. The loan will be repaid in 6 months and any interest will be paid at the same time the loan is repaid. The interest rate is 4.5% 4. January 1, the company signed a 1 year rent agreement with a property management company. They paid a refundable damage deposit of $500 and the first and last month of rent of $3,000 ($1,500 per month rent expense) 5. January 8th, you receive your first residual SOCAN cheque for your single you recently released. The cheque was for $50,000. This is considered revenue, however you dont expect this to be a main source of income for the company and you likely wont get any more residual SOCAN cheques going forward. 6. January 10th, you sign a new band called Hopeful Bliss to your label. The signing expense was for $5,000 7. January 1st , You decide to purchase some recording equipment with a value of $50,000. You will pay for the equipment at a later date. The equipment will last 5 years. 8. January 15th, Hopeful Bliss has asked you for a short term loan of $20,000 to help finish recording their album. You agree and come to an agreement with Hopeful Bliss for a 5% interest rate on the loan. These types of loans will not be a normal business activity. 9. January 15th, the company purchased vinyl inventory to be used to make records. Cost was $60,000. They paid $5,000 right away and will pay the balance at a later date 10. January 20th, you think about hiring a staff member. You will pay them $20/ hour and figure they will work 20 hours a week. They would start the next day. 11. January 21st, the company incurs the following expenses. All will be paid at a later date: o Repairs and Maintenance to the new office - $1,500 o Office supplies all used during the month - $250 o Entertainment expenses trying to attract new bands - $400 12. January 25th You pay salary expenses of $1,000 that covers the period of January 20- 24th 13. January 27th - The company pays the balance of the vinyl inventory purchased in #9 14. January 28th - A deposit was made by a local music company for $5,000 worth of records. These will be made and delivered next month Sales 15. A large record sale for the month was made and delivered, in addition to the items from above, for $150,000 by Norms records. 55% of the sale was paid immediately. The remainder will be paid next month. The cost of the records sold was $39,000 Adjusting entries to do 16. At the month end inventory count, it was found that $2,000 of vinyl inventory was warped and will need to be thrown out. 17. The company will need to adjust the interest earned on the loan to Hopeful Bliss 18. The company will need to adjust the interest expense on the Royal Bank loan. 19. Depreciation expense on the recording equipment 20. The company will need to make sure the liability insurance is correct for the month 21. The company will need to make sure the rent expense is correct for the month 22. February 1 you pay salary expenses of $2,000. The entire amount is for salaries incurred from January 25-31st . Required: In excel, prepare, in good form, the journal entries that are required from the transaction list (from above) Post the journal entries into the General Ledger. Prepare and post any adjusting entries that are required at month end Create a Trial Balance from the General Ledger ending balances Create a Balance Sheet and Income statement, in good form, for the Month of December