Tony and Suzie graduate from college in May 2021 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, 2021, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 35,000 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 transactions occur from July 1 through December 31. Jul. 1 Sell $17,500 of common stock to Suzie. Jul. 1 Sell $17.500 of common stock to Tony. Jul. 1 Purchase a one-year insurance poliey for $5,520 ($460 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 $1,700 on account. Jul. 7 Pay for advertising of $380 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $40 on the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $16,000 cash. Jul. 15 On the day of the clinie, Great Adventures receives cash of $1,600 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 $2,200. Jul. 24 Pay $950 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $110 in advance or $160 on the day of the clinic. Jul. 30 Great Adventures receives cash of $7,700 in advance from 70 kayakers for the upcoming kayak elinie. Aug. 1 Great Adventures obtains a $45,000 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 la due in three years, and 68 annual interest is due each year on July 31. Aug. The company purchases 14 kayaks, paying $19,500 cash. Aug. 10 Twenty additional kayakers pay $3,200 ($160 each), in addition to the $7,700 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 alinie, and the company receives $11,100 cash. Aug. 24 orfice supplies of $1,700 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 renta a storage shed for one year, paying $3,240 ($270 per month) in advance. Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,900 cash. oct. 17 Tony conduct an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, uno a compass, and orient through heavily wooded areas. The company receives $10,000 cash. Dec. 1 Tony decides to hold the company's first adventure race on December 15. Four-person team 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 $650. Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor, Victor will be paid $40 in alary for each team that compete in the race. His salary will be paid after the race 40 points Book References August 10, and attendees can pay 9110 in advance or $160 on the day of the clinic. Jul. 30 Great Adventures receives cash of $7,700 in advance from 70 kayakers for the upcoming kayak elinic. I Great Adventures obtains a $45,000 low-interest loan for the company from the city council, which has recently panned an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 64 annual interest is due each year on July 31. Aug. 4 The company purchases 14 kayaks, paying $19,500 cash. Aug. 10 Twenty additional kayakera pay $3,200 ($160 each), in addition to the $1.700 that was paid in advance on July 30, on the day of the elinie. Tony conducts the first kayak elinie. Aug. 17 Tony conducte a second kayak clinic, and the company receives $11,100 cash. Aug. 24 office supplies of $1,700 purchased on July 4 are paid in full. Sap. 1 To provide better storage of mountain bikes and kayake when not in use, the company rents a storage shed for one year, paying $3,240 $270 per month) in advance. Sep. 21 Tony conducts & rock-climbing clince. The company receives $14.900 cash. Oet. 17 Tony conducts an orienteering clinic. Participants practice how to understand a topographical map, read an altineter, use a compass, and orient through heavily wooded areas. The company receives $18,000 cash. Dee. 1. Tony decides to hold the company's first adventure race on December 15. Your 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 $650. Dee. 5 To help organize and promote the race, Tony hiren his college roommate, Vietor. Victor will be paid $40 in salary for each team that competes in the race. His salary will be paid after the race. Dec. 8 The company pays $1.400 to purchase a parent from a ntate park where the race will be held. The amount is recorded as a miscellaneous expense. Dec. 12. The company purchases racing supplies for $2,900 on account duo in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, enack food and drinks for participants, and field markers to prepare the racecourse. Dec. 15 The company receives $26,000 cash from a total of forty tears, and the race to held. Deo, 16 The company pays Vietor's salary of $1,600. Dec. 3. The company pays A dividend of $4,700 (02,350 to Tony and $2,350 to donie). Dec. 31 Using his perional money, Tony purchase a dlanond ring for $4,400. Tony surprises Sunle by propaning that they get married. Susie accepts and they get married The following Information relates to year-end adjusting entries as of December 31, 2021. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7100. 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 $1,700 of office supplies purchased on July 4, $200 remains e. Interest expense on the $45,000 loan obtained from the city council on August 1 should be recorded f. Or the $2,900 of racing supplies purchased on December 12. $230 remains. g. Suzie calculates that the company owes $13,500 in income taxes. View transaction list Journal entry worksheet 1 30 31 32 33 34 35 36 37 > . Prepare the closing entry for revenue. Note: Enter debits before credits Debit Credit Date General Journal Dec 31, 2021 Service Revenue (Clinic) Service Revenue (Racing) Retained Earnings 26,000 Record entry Clear entry View general Journal nts Requirement General Journal General Ledger Trial Balance Income Statement Statement of SE Balance Sheet The balance sheet is the accounting equation: Assets = Llabilities + Equity. Each asset and liability account is reported separately balance sheet. eBook Post-closing eferences Assets GREAT ADVENTURES, Inc. Balance Sheet December 31, 2021 Liabilities Current Liabilities: 108,610 Accounts Payable 200 Interest Payable 230 Income Taxes Payable 2,160 2,760 Total Current Liabilities $ Current Assets: Cash Supplies (Office) Supplies (Racing) Prepaid Rent Prepaid Insurance na 2,900 1.125 13,500 17,525 113,960 17,525 Total Current Assets Long-term assets: Equipment (Bikes) Equipment (Kayaks) Accumulated Depreciation Total Liabilities Stockholders' Equity Common Stock 35,000 16,000 19,500 (7.100) 0 142,360 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 35,000 52,525 Total Assets S $