[The following information applies to the questions displayed below.] On July 1, 2018, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The following transactions occur from August 1 through December 31. Also, the balances are provided for the month ended July 31. The articles of incorporation state that the corporation will sell 21,000 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. Jul. 1 Sell $10,500 of common stock to Suzie. Jul. 1 Sell $10,500 of common stock to Tony. Jul. 1 Purchase a one-year insurance policy for $5,640 ($470 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,100 associated with incorporation. Jul. 4 Purchase office supplies of $1,900 on account. Jul. 7 Pay for advertising of $220 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $30 the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $11,100 cash. Jul. 15 On the day of the clinic, Great Adventures receives cash of $1,200 from 40 bikers. Tony conducts the mountain biking clinic. Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $1,600. Jul. 24 Pay for advertising of $790 to a local radio station for a kayaking clinic to be held on August 10. Attendees can pay $120 in advance or $170 on the day of the clinic. Jul. 30 Great Adventures receives cash of $7,200 in advance from 60 kayakers for the upcoming kayak clinic. Aug. 1 Great Adventures obtains a $49,000 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 6% annual interest is due each year on July 31. Aug. 4 The company purchases 14 kayaks, paying $18,200 cash. Aug. 10 Twenty additional kayakers pay $3,400 ($170 each), in addition to the $7,200 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic. Aug. 17 Tony conducts a second kayak clinic, and the company receives $11,500 cash. Aug. 24 Office supplies of $1,900 purchased on July 4 are paid in full. Sep. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed, purchasing a one-year rental policy for $3,360 ($280 per month). Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,800 cash. Oct. 17 Tony conducts 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 $18,500 cash. Dec. 1 Tony decides to hold the companys 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 $600.Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $50 in salary for each team that competes in the race. His salary will be paid after the race.Dec. 8 The company pays $1,900 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense.Dec. 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.Dec. 15 The company receives $24,000 cash from a total of forty teams, and the race is held.Dec. 16 The company pays Victors salary of $2,000. Dec. 31 The company pays a dividend of $4,900 ($2,450 to Tony and $2,450 to Suzie). Dec. 31 Using his personal money, Tony purchases a diamond ring for $5,100. 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, 2018. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,400. b. Six months worth of insurance has expired. c. Four months worth of rent has expired. d. Of the $1,900 of office supplies purchased on July 4, $350 remains. e. Interest expense on the $49,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,600 of racing supplies purchased on December 12, $260 remains. g. Suzie calculates that the company owes $14,200 in income taxes. Assume the following ending balances for the month of July.

	Balance
Cash	$	12,150
Prepaid insurance		5,640
Supplies (Office)		1,900
Equipment (Bikes)		11,100
Accounts payable		1,900
Deferred revenue		7,200
Common stock		21,000
Service revenue (Clinic)		2,800
Advertising expense		1,010
Legal fees expense DebitCredit1Jul 01, 2018Cash10,500Common stock10,5002Jul 01, 2018Cash10,500Common stock10,5003Jul 01, 2018Prepaid insurance5,640Cash5,6404Jul 02, 2018Legal fees expense1,100Cash1,1005Jul 04, 2018Supplies (Office)1,900Accounts payable1,9006Jul 07, 2018Advertising expense220Cash2207Jul 08, 2018Equipment (Bikes)11,100Cash11,1008Jul 15, 2018Cash1,200Service revenue (Clinic)1,2009Jul 22, 2018Cash1,600Service revenue (Clinic)1,60010Jul 24, 2018Advertising expense790Cash79011Jul 30, 2018Cash7,200Deferred revenue7,20012Aug 01, 2018Cash49,000Notes payable49,00013Aug 04, 2018Equipment (Kayaks)18,200Cash18,20014Aug 10, 2018Deferred revenue7,200Cash3,400Service revenue (Clinic)10,60015Aug 17, 2018Cash11,500Service revenue (Clinic)11,50016Aug 24, 2018Accounts payable1,900Cash1,90017Sep 01, 2018Prepaid rent3,360Cash3,36018Sep 21, 2018Cash14,800Service revenue (Clinic)14,80019Oct 17, 2018Cash18,500Service revenue (Clinic)18,50020Dec 08, 2018Miscellaneous expense1,900Cash1,90021Dec 12, 2018Supplies (Racing)2,600Accounts payable2,60022Dec 15, 2018Cash24,000Service revenue (Racing)24,00023Dec 16, 2018Salaries expense2,000Cash2,00024Dec 31, 2018Dividends4,900Cash4,900 1Dec 31, 2018Depreciation expense8,400Accumulated depreciation8,4002Dec 31, 2018Insurance expense2,820Prepaid insurance2,8203Dec 31, 2018Rent expense1,120Prepaid rent1,1204Dec 31, 2018Supplies expense (Office)1,550Supplies (Office)1,5505Dec 31, 2018Interest expense1,225Interest payable1,2256Dec 31, 2018Supplies expense (Racing)2,340Supplies (Racing)2,3407Dec 31, 2018Income tax expense14,200Income tax payable14,200		1,100

3. Post transactions from August 1 through December 31 and adjusting entries on December 31 to T-accounts.