prepare closing entries and post to ledger accounts

Required information [The following information applies to the questions displayed below.] On December 1, Year 1, John and Patty Driver formed a corporation called Susquehanna Equipment Rentals. The new corporation was able to begin operations immediately by purchasing the assets and taking over the location of Rent-It, an equipment rental company that was going out of business. The newly formed company uses the following accounts. The corporation performs adjusting entries monthly. Closing entries are performed annually on December 31 . During December of its first year of operations, the corporation entered into the following transactions. a. The advance payment of rent on December 1 covered a period of three months. b. The annual interest rate on the note payable to Rent-It is 6 percent. c. The rental equipment is being depreciated by the straight-line method over a period of eight years. Any salvage value at the end of its useful life is expected to be negligible and immaterial. d. Office supplies on hand at December 31 are estimated at $610. e. During December, the company earned $4,300 of the rental fees paid in advance by McNamer Construction Company on December 8 1. As of December 31, six days' rent on thie backhoe rented to Mission tandscaping on December 26 has been earned. 9. Salarles eamed by employees since the last payroll date (December 26 ) amounted to $1,900 at month-end. h. It is estimated that the company is subject to an income tax rate of 30 percent of profit before income taxes ftotal revenue minus all expenses other than income taxes). These taxes will be payable in Year? \begin{tabular}{|c|c|c|c|c|c|} \hline & No & Date & General Journal & Dobit & Credit \\ \hline & 1 & Dec. 31 & Rental fees earned & 44,260 & \\ \hline & & & Income summary & & 44,260 \\ \hline & & & & & \\ \hline \multirow[t]{10}{*}{7} & 2 & Dec. 31 & Income summary & .28,234 & \\ \hline & & & 4. Salaries expense & & 12,100 \\ \hline & & & Maintenance expense & & 900 \\ \hline & & & Utilities expense & & 680 \\ \hline & & & Rent expense & & 3,600 \\ \hline & + & & Office supplies expense & & 790 \\ \hline & & & Depreciation expense & & 2,700 \\ \hline & & & Interest expense & & 596 \\ \hline & & e & lcome taxes expense - & & 6,868 \\ \hline & 3 & & + & & \\ \hline & 3 & Dec31 & Income summary & 16,026 & \\ \hline & & & Retained earnings & & 16,026 \\ \hline & & & & 7 & \\ \hline & 4 & Dec. 31 & Retained earnings & 2,400 & \\ \hline & & 16 & Dividends & & 2,400 \\ \hline \end{tabular} Dec. 1 Issued to John and Patty Oriver 24,000 new shares in exchange for a total of $24,000 cash. Dec, 1 Purchased for $259,200 all of the equipment formerly owned by Rent-It. Paid $140,000 cash and issued a 1 -year note payable for $119,200. The note, plus a11 12 months of accrued interest, are due llovenber 30 , Year 2 . Dec. 1 Paid $16,800 to Shapiro Realty as three month' advance rent on the rental yard and office formerly occupied by Rent-It. Dec. 4 Purchased office supplies on account from Modern office Co., \$1, 400. Payment due in 30 days. (These supplies are expected to last for several months; debit the office supplies asset accaunt.) Dec. 8 Received $8,300 cash as advance payment on equipeent rental from Mchaser Construction Conpany. (Credit Unearned Rental Fees.) Dec.12 Paid salaries of $5,100 for the first two weeks in Deceober. Dec. 25 Fxcluding the MeNamer advance, equipent rentol fees earned during the finst 15 days of Decenber aeounted to $18,400, of which $12,600 was received in cash. Dec.17 Purchased on account from Earth Movers, Inc., $900 in parts needed to perforn basic naintenance on a rental tractor. Payment is due in 18 days. Dec. 23 Collected $2,800 of the accounts receivsble recorded on Deceber 15. Dec.26 Mented a backhoe to Mission Landscaping at a price of $260 pur day, to be paid when the backhoe is returned. Mission tandscaping expects to keep the backhoe for about two or three weeks. Dec.26 paid biweekly salaries, \$5, 109. Dec.27 Paid the account parable to Earth Movers, Inc., $900. Dee. 2 Declared a dividend of 10 cents per share, payable on lanuary 15, Year 2. Dee. 29 Susquehana Equipent Mentals was named, along with Missien Landscaping and Colifer Censtruction, as a co. defendant in a \$30, 000 lawsuit flled on behalf of Kevin Darvenport. Mission Landscaping had left the rented backhoe in a fenced construction site osed by Collier Construction. After workine hours on Decenber 26 . Davenport had clinbed the fence to play on parked construction equipeent, While playing on the backhoe, he fell and broke his are. The extent of the coepany's legal and financial responsibility for this accilent, if any, cannet be detereined at this ties. (Notei This event does not require a journal entry at this tien, but asy require diclosiare in notes accompanying the statesents.) Des.29 Purchased a 12-eonth public liability insurance policy for \$9, 120. This policy protects the coepany ogainst liability for injuries and property dimage caused by its equipeas. Howevec, the pollsy goes into effect on Jaeuary 1, Year 2, and affords no coverage for the injuries sustained by Kevin Oavenport on Deceaber 26. Dec.31 lleceived a bili froe Universal utilities for the eanth of Deceber, \$6ed, Payment is due in as days, Dec. 31 Equigment pental fees earned during the second half of Decreber amounted to $20,000, of which $15,600 was received in cash