Solomon and his BFF Newt, started a consulting business on June 1. The following are the transactions for the first year. 1. Each owner purchased 12 the firm's common stock for $5,000 each. 2. On June 1, the firm borrowed $10,000 from a local bank. The loan has a term of 2 year at 12% interest. On the first anniversary date, one year of interest is due. On the second anniversary date, a second year of interest is due and the principal is due. 3. The firm paid $9,000 for computer equipment, software and a phone system on June 1. It is expected that everything will be replaced within 3 years. (Assume all transactions are completed with cash unless told otherwise.) 4. The firm hired Rick & Ron to install and set-up the office, network, phone-systems, etc. Rick & Ron billed Solomon's Consulting $2,000. The firm recorded this as miscellaneous expense. During the subsequent months, the following activities took place, record the general journal entries 5. On June 1, the firm purchased a one-year liability insurance policy for $2,400. The firm recorded the entire $2,400 as insurance expense on June 1. 6. Newt was having some family problems so the company lent him $4,000 at 15% on August 31. The $4,000 was due in 6 months and interest will be paid when the note matures. 7. On September 1, the firm received $30,000 cash and signed a contract with Mitt to provide consulting services for the next 6 months. The firm recorded the entire $30,000 as service revenue on September 1. 8. During the year, the firm sold $60,000 of consulting services to various parties. $20,000 was collected in cash with the balance on account. 9. During the year, the firm incurred miscellaneous expenses of $10,000; $6,000 was paid in cash with the other $4,000 on account. 10. At year end, all the office supplies on hand were counted, the amount was $850. There were no supplies on hand at the beginning of the year, but the firm had made $7,000 in purchases in supplies during the year. No previous journal entries related to supplies have been made. 11. At year-end, the firm paid a dividend of $1,000 cash to each shareholder from retained earnings. However, Newt wanted his dividend was applied to his outstanding loan balance and he tore up the dividend check for $1,000 that he received. Instructions: Prepare the journal entry for each transaction exactly as described. Some transactions may be recorded incorrectly as described, however, just prepare the journal entry as described. Generally, record the journal entries in the sequence above. All adjusting & correcting journal entries happen at year-end. When both a correcting and an adjusting entry are needed for the same transaction, do one journal entry. Prepare a balance sheet and income statement after all journal entries and adjusting journal entries have been made