Preparing Accounting Transactions and Adjustments and Financial Statements Stocken Surf Shop began operations on July 1 with an initial investment of $50,000. During the first three months of operations, the following cash transactions were recorded in the firm's checking account. Deposits Checks Drawn Initial investment by owner . $ 50,000 Rent . . $ 24,000 Collected from customers. 81,000 Fixtures and equipment . . . 25,000 Borrowings from bank. . . ... .. 10,000 Merchandise inventory . . . . . . . . 62,000 $141,000 Salaries. .. .. . . . . . . . . 8,000 Other expenses . . 13,000 $132,000 Additional information: 1. Most sales were for cash; however, the store accepted a limited amount of credit sales; at Septem- ber 30, customers owed the store $9,000. 2. Rent was paid on July 1 for six months. (The company recorded prepaid expense, an asset, on July 1.) 3. Salaries of $4,000 per month were paid on the first of each month for salaries earned in the month prior. 4. Inventories were purchased for cash; at September 30, inventory of $28,000 was still available. 5. Fixtures and equipment were expected to last five years (or 60 months), with zero salvage value. 6. The bank charges 12% annual interest (1% per month) on the $10,000 bank loan. Stocken took out the loan on July 1