Problem

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Required information

$[$The following information applies to the questions displayed below$]$

On December $1,$ Year $1,$ Wayne and Susan Li formed a corporation called French Broad Equipment Rentals. The new corporation was able to begin operations immediately by purchasing the assets and taking over the location of Rent$-$lt$,$ an equipment rental company that was going out of business. The newly formed company uses the following accounts:

Cash

Accounts Receivable

Prepaid Rent

Prepaid Insurance

Office Supplies

Rental Equipment

Accumulated Depreciation: Rental Equipment

Notes Payable

Accounts Payable

Interest Payable

Salaries Payable

Dividends Payable

Unearned Rental Fees

Income Taxes Payable

Capital Stock

Retained Earnings

Dividends

Income Summary

Rental Fees Earned

Salaries Expense

Maintenance Expense

Utilities Expense

Rent Expense

Office Supplies Expense

Depreciation Expense

Interest Expense

Income Taxes Expense December of its first year of operations, the corporation entefed into the following transations:

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:

December $1$

December $1$

December $1$

Decenber $4$

December B

December $12$

December $15$

December $17$

December $23$

December $26$

Decenber $26$

December $27$

December $28$

December $29$

December $29$

Issued to Wayne and Susan Li $20,000$ shares of capital stock in exchange for a total of $$240,000$ cash.

Purchased for $$288,000$ all of the equipment formerly owned by Rent$-$It$.$ Paid $$168,000$ cash and issued a one$-$year note payable for $$120,000.$ The note, plus all $12$ months of accrued interest, are due Novenber $39,$ Year $2.$

Paid $$14,490$ to Shapiro Realty as three months' advance rent on the rental yard and office formerly occupied by Rent$-$It$.$

Purchased office supplies on account fron Modern office Compamy, $$1,206.$ Payment due in $30$ days. $($These supplies are expected to last for several months; debit the Office Supplies asset account.$)$

Received $$9,690$ cash as advance paynent on equipnent rental from McNamer Construction Company. $($Credit Unearned Rental Fees.$)$

Paid salaries of $$6,240$ for the first two weeks in December.

Excluding the McNamer advance, equipment rental fees earned during the first $15$ days of December amounted to $$21,690,$ of which $$14,490$ was received in cash.

Purchased on account from Earth Movers, Incorporated, $$720$ in parts needed to perform basic maintenance on a rental tractor. Payment is due in $10$ days.

Collected $$2,490$ of the accounts receivable reconded on Decenber $15.$

Rented a backhoe to Mission Landscaping ac a price of $$300$ per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks.

Paid biweekly salaries, $$6,246.$

Paid the account payable to Earth Movers, Incorporated, $$720.$

Declared a dividend of $12$ cents per share, payable on January $15,$ Year $2.($Hint: Credic the Dividends Payable account, $)$

French Broad Equipnent Rentals was named, aLong with Mission Landscaping and Collier Construction, as a co$-$defendant in a $$30,$ Q$90$ Iawsuit filled on behalf of Kevin Dawenporte. Mission Landscaping had lefe the rented backhoe in a fenced construction site conned by Collier Construttion. After working hour's on Dectember $26,$ Dawenport had climbed the fence to play on parked construction equipnent. While playing on the backhoe, he fell and broke his arm. The extent of the company"s legall and finaricial responsibility for this accident, if any, cannot be detenmined at this time. $($Note: This event doss not require a journal entry at

Purchased a $12-$month public liability insurance policy for $$11,520.$ This policy protectes the company against liabilicy for injuries and property danage caused by its equipment, However, the policy goes inco effect on January $1,$ year $2,$ and affords no covernage for the injuries sustained by Kevin Davenport on Decenber $26.$