Retail Co. reported the balance sheet for fiscal year 2015 as follows.

Retail Co.
Balance Sheet
December 31, 2015
Cash	18,600
Accounts Receivable	33,000
Notes Receivable	10,000
Interest Receivable	600
Merchandise Inventory	22,000
Prepaid Insurance	4,500
Total Current Assets	88,700
Computer Systems:
At Cost	78,000
Less Accumulated Depreciation	(26,000)
Net Computer System	52,000
Total Assets	140,700
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts Payable	36,000
Dividends Payable	1,800
Salaries Payable	6,500
Taxes Payable	10,000
Unearned Revenue	600
Total Liabilities	54,900
Common Stock	40,000
Retained Earnings	45,800
Total Shareholders' Equity	85,800
Total Liabilities and Shareholders' Equity	140,700

Part I: Journal Entries and T-accounts

Required: Prepare Journal Entries for the below transactions occurred during fiscal year 2016. Also, post each transaction to T-accounts and prepare income staement.

a)The insurance policy cost $6,000 when the company paid the two-year insurance premium on June 30, 2015. As of December 31, 2016, the company must record the adjusting entries for fiscal year 2016 (Note that company has made adjusting entries for fiscal year 2015 and thus has a debit balance of prepaid insurance in 2015 balance sheet.b)During 2016, the company declared $6,000 of dividends, of which the firm paid $3,000 in cash to shareholders during 2016 and will pay the remainder during 2017. c)Early in 2016, the company also paid dividends of $1,800 cash that the company declared during 2015. (Note that company has a credit balance of dividend payable in 2015 balance sheet)d)On July 1, 2015, the company lent Appleton Co., $10,000 cash on a nine-month, $900 interest-bearing, note receivable. This transaction and accompanying adjusting entries were recorded at the end of 2015. On April 1, 2016, the company received $10,900 cash from Appleton Co., in full settlement of Appletons nine-month note. (Hint: First, calculate interest income to be realized in 2016. Also, account for remaining balances of notes receivable and interest receivable in 2015 balance sheet)e)The company purchased delivery trucks on March 1, 2016. To finance the acquisition, it gave the seller a $60,000 four-year note that bears interest of 10% per year. (Hint: Use Trucks and Notes Payable accounts)f)The company must pay interest on the note each six months ($3,000 = $60,000*10%*6/12), beginning September 1, 2016. The company made payment on this date.g)As of December 31, 2016, the company must record the adjusting entries for interest on the note as follows.h)At the end of 2016, the company depreciates the delivery trucks by $10,000.i)The computer systems are depreciated by $13,000 per yearj)The company shipped all the merchandise to customers, for which the customer had already paid in 2015 ($600).k)In 2016, the company received $1,400 from in advance paying customers for merchandise to be shipped in 2017 l)The company collected $208,600 on account from its customers m)During 2016, the company paid $115,000 on accounts payable to merchandise suppliers.n)The company paid $85,000 in cash to employees during 2016. Of this amount, $6,500 related to services that employees performed during 2015, and $4,000 related to services that employees will perform during 2017. Employees performed the remainder of the service during 2016.o)On December 31, 2016, the company owes employees $1,300 for services performed during the last several days of 2016.p)The company paid $27,000 in cash for income taxes in April 2016. Of this amount, $10,000 relates to income taxes applicable to 2015, and $3,000 relates to income taxes applicable to 2017. The remainder of payment is applicable to 2016.q)On December 31, 2016, the company learned that it owes additional $4,000 in income taxes, which will be paid off in next year.