C3-77. Preparing Adjusting Entries (FSET) Seaside Surf Shop began operations on July 1 with an initial investment of $40,000. During the initial 3 months of operations, the following cash transactions were recorded in the firm's checking account. Cash receipts 1. < 2. 3. 4. Cash payments Initial investment by owner... $ 40,000 Rent $ 19,200 Collected from customers 64,800 Fixtures and equipment. 20,000 Borrowed from bank 7/1 .. 8,000 Merchandise inventory. 49,600 Total cash receipts $112,800 Salaries 4,800 Other expenses 10,400 Total cash payments. $104,000 Additional information 5. 6. Most sales were for cash; however, the store accepted a limited amount of credit sales; at September 30, customers owed the store $7,200. Rent was paid on July 1 for six months (short-term lease). Salaries of $2,400 per month are paid on the 1st of each month for salaries earned in the month prior. pg. 3-48 Inventories are purchased for cash; at September 30, inventory worth $16,800 was available. Fixtures and equipment were expected to last five years with zero salvage value. The bank charges 12% annual interest (1% per month) on its bank loan. REQUIRED Prepare any necessary adjusting entries at September 30 using the financial statement effects template.