Josiah and Harper graduate from college in May 2018 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, theyll 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, 2018, Josiah and Harper organize their new company as a corporation, Awesome Recreation, Inc. The articles of incorporation state that the corporation will sell 40,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Josiah and Harper will act as co-presidents of the company. The following transactions occur from July 1 through December 31.

Jul.	1		Sell $20,000 of common stock to Harper.
Jul.	1		Sell $20,000 of common stock to Josiah.
Jul.	1		Purchase a one-year insurance policy for $4,800 ($400 per month) to cover injuries to participants during outdoor clinics.
Jul.	2		Pay legal fees of $1,500 associated with incorporation.
Jul.	4		Purchase office supplies of $1,800 on account.
Jul.	7		Pay for advertising of $300 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $50 the day of the clinic.
Jul.	8		Purchase 10 mountain bikes, paying $12,000 cash.
Jul.	15		On the day of the clinic, Awesome Recreation receives cash of $2,000 from 40 bikers. Josiah conducts the mountain biking clinic.
Jul.	22		Because of the success of the first mountain biking clinic, Josiah holds another mountain biking clinic and the company receives $2,300.
Jul.	24		Pay for advertising of $700 to a local radio station for a kayaking clinic to be held on August 10. Attendees can pay $100 in advance or $150 on the day of the clinic.
Jul.	30		Awesome Recreation, Inc., receives cash of $4,000 in advance from 40 kayakers for the upcoming kayak clinic.
Aug.	1		Awesome Recreation, Inc., obtains a $30,000 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 6% annual interest is due each year on July 31.
Aug.	4		The company purchases 14 kayaks, paying $28,000 cash.
Aug.	10		Twenty additional kayakers pay $3,000 ($150 each), in addition to the $4,000 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.
Aug.	17		Josiah conducts a second kayak clinic, and the company receives $10,500 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, purchasing a one-year rental policy for $2,400 ($200 per month).
Sep.	21		Harper conducts a rock-climbing clinic. The company receives $13,200 cash.
Oct.	17		Harper conducts an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. The company receives $17,900 cash.
Dec.	1		Josiah decides to hold the companys first adventure race on December 15. Four-person teams will race from checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-climbing skills. The first team in each category to complete all checkpoints in order wins. The entry fee for each team is $500.
Dec.	5		To help organize and promote the race, Josiah hires his college roommate, John Smith. John Smith will be paid $50 in salary for each team that competes in the race. His salary will be paid after the race.
Dec.	8		The company pays $1,200 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense.
Dec.	12		The company purchases racing supplies for $2,800 on account due in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse.
Dec.	15		The company receives $20,000 cash from a total of forty teams, and the race is held.
Dec.	16		The company pays John Smiths salary of $2,000.
Dec.	31		The company pays a dividend of $4,000 ($2,000 to Josiah and $2,000 to Harper).
Dec.	31		Using his personal money, Josiah purchases a diamond ring for $4,500. Josiah surprises Harper by proposing that they get married. She accepts and they get married!

The following information relates to year-end adjusting entries as of December 31, 2018.

1. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,000.
2. Six months worth of insurance has expired.
3. Four months worth of rent has expired.
4. Of the $1,800 of office supplies purchased on July 4, $300 remains.
5. Interest expense on the $30,000 loan obtained from the city council on August 1 should be recorded.
6. Of the $2,800 of racing supplies purchased on December 12, $200 remains.
7. Harper calculates that the company owes $14,000 in income taxes.

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1. Journal Entries
2. Post to T-Accounts