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 duringfiscal 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 Appleton's 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.