Help Save & 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 kayaking. Upon developing a customer base, they'll 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 20,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will 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 Suzie. Jul. 1 Sell $10,000 of common stock to Tony. Jul. 1 Purchase a one-year insurance policy for $5,640 (5470 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,700 associated with incorporation. Jul. 4 Purchase office supplies of $1,800 on account. Jul. 7 Pay for advertising of $230 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $40 on the day of the clinic. Jul. 8 Purchase 18 mountain bikes, paying $18,300 cash. Jul. 15 on the day of the clinic, Great Adventures receives cash of $2,400 from 60 bikers. Tony conducts the mountain biking clinic. Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $2,750. Jul. 24 Pay $690 to a local radio station for advertising to appear inmediately. A kayaking clinic will be held on August 10, and attendees can pay $140 in advance or $190 on the day of the clinic. Jul. 30 Great Adventures receives cash of $9,806 in advance from 70 kayakers for the upcoming kayak clinic Aug. 1 Great Adventures obtains $49,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 64 annual interest is due each year on July 31. Aug. 4 The company purchases 14 kayaks, paying $18,200 cash. Aug. 10 Twenty additional kayakers pay $3,860 ($19e each), in addition to the $9,800 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic. Aug. 17 Tony conducts a second kayak clinic, and the company receives $18,500 cash. Aug. 24 Office supplies of $1,800 purchased on July 4 are paid in full. Sep. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $3,720 ($310 per month) in advance. Sep. 21 Tony conducts a rock-climbing clinic. The company receives $13,488 cash. 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 $7,400. b. Six months' of the one-year insurance policy purchased on July 1 has expired. c. Four months of the one-year rental agreement purchased on September 1 has expired. d. Of the $1,800 of office supplies purchased on July 4, $390 remains. e. Interest expense on the $49,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,600 of racing supplies purchased on December 12, $120 remains. g. Suzle calculates that the company owes $13,500 in income taxes. urnal entry worksheet No 1 - Date Dec 31, 2021 Debit Credit 6 General Journal Depreciation Expense Accumulated Depreciation 7,400 7.400 NU 2 Dec 31, 2021 Prepaid Insurance Cash 5,640 5,640 3 Dec 31, 2021 Rent Expense Prepaid Rent ces 4 Dec 31, 2021 Supplies Expense (Office) Supplies (Office) 1,410 1,410 5 Dec 31, 2021 Interest Expense Interest Payable 0 Dec 31, 2021 Supplies Expense (Racing) Supplies (Racing) 2,480 2.480 7 Dec 31, 2021 Income Tax Expense Income Tax Payable 13,500 13,500