Required information [The following information applies to the questions displayed below.] Tony and Suzie graduate from college in May 2024 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, 2024, Tony and Suzie organize their new company as a corporation, Great Adventures Incorporated The articles of incorporation state that the corporation will sell 37,000 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 business activities occur during July for Great Adventures. July 1 July 1 July 1 July 2 July 4 July 7 July 8 July 15 July 22 July 24 July 30 Sell $18,500 of common stock to Suzie. Sell $18,500 of common stock to Tony. Purchase a one-year insurance policy for $5,520 ($460 per month) to cover injuries to participants during outdoor clinics. Pay legal fees of $1,100 associated with incorporation. Purchase office supplies of $1,900 on account. Pay $240 to a local newspaper for advertising to appear immediately for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $50 the day of the clinic. Purchase 10 mountain bikes, paying $13,900 cash. On the day of the clinic, Great Adventures receives cash of $2,500 in total from 50 bikers. Tony and Suzie conducts the mountain biking clinic. Because of the success of the first mountain biking clinic, Tony and Suzie holds another mountain biking clinic and the company receives $2,950. Pay $810 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $100 in advance or $150 on the day of the clinic. Great Adventures receives total cash of $8,000 in advance from 80 kayakers for the upcoming kayak clinic. The following transactions occur over the remainder of 2024. August 1 August 4 August 10 August 17 August 24 September 1 Great Adventures obtains a $34,000 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 68 annual interest is due each year on July 31. The company purchases 14 kayaks, paying $14,300 cash. Tony and Suzie conduct the first kayak clinic. In addition to the $8,000 that was received in advance from kayakers on July 30, the company receives additional cash of $3,000 from twenty new kayakers on the day of the clinic. Tony and Suzie conducts a second kayak clinic, and the company receives $10,600 cash. Office supplies of $1,900 purchased on July 4 are paid in full. To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $4,560 ($380 per month) in advance. September 21 Tony and Suzie conduct a rock-climbing clinic. The company receives $14,600 cash. October 17 Tony and Suzie conduct 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 $18,400 cash. December 1 December 5 Tony and Suzie decide to hold the company's 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 $680. To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $60 in salary for each team that competes in the race. His salary will be paid after the race. December 8 December 12 The company purchases racing supplies for $2,600 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. 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. December 15 The company receives $27,200 cash from a total of forty teams, and the race is held. December 16 The company pays Victor's salary of $2,400. December 31 The company pays a dividend of $4,600 ($2,300 to Tony and $2,300 to Suzie). December 31 Using his personal money, Tony purchases a diamond ring for $4,400. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married! The following information relates to year-end adjusting entries as of December 31, 2024. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,300. 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 $1,900 of office supplies purchased on July 4, $310 remains. e. Interest expense on the $34,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,600 of racing supplies purchased on December 12, $170 remains. g. Suzie calculates that the company owes $14,300 in income taxes. 3. Post transactions from July 1 through December 31 and adjusting and closing entries on December 31 to T-accounts. 7. Post the closing entries of retained earnings to the T-account. Debit Beginning Balance Ending Balance Beginning Balance Ending Balance Beginning Balance Ending Balance Cash 0 Prepaid Insurance Credit Debit Credit Beginning Balance Ending Balance 0 Prepaid Rent Supplies (Office) Debit Credit Debit Credit Beginning Balance Ending Balance 0 Supplies (Racing) Equipment (Bikes) Debit Credit Debit Credit Beginning Balance 0 Equipment (Kayaks) Debit Credit Beginning Balance Ending Balance Ending Balance Beginning Balance Ending Balance 0 Accumulated Depreciation Debit Credit 0 Accounts Payable Deferred Revenue Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Beginning Balance Ending Balance Ending Balance 0 Interest Payable Income Tax Payable Debit Credit Debit Credit Beginning Balance Ending Balance 0 Beginning Balance Ending Balance Notes Payable Common Stock Debit Credit Debit Credit Beginning Balance Ending Balance Retained Earnings Dividends Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Service Revenue (Clinic) Service Revenue (Racing) Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance 0 Advertising Expense Legal Fees Expense Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance 0 Miscellaneous Expense Salaries Expense Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Depreciation Expense Insurance Expense Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Rent Expense Supplies Expense (Office) Debit Credit Debit Credit Beginning Balance Beginning Balance Ending Balance Ending Balance Supplies Expense (Racing) Debit Credit Debit Beginning Balance Beginning Balance Ending Balance Income Tax Expense Debit Credit Beginning Balance 0 Interest Expense Ending Balance 0 Credit