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 Suzle organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 34,000 shares of common stock for $1 each Each share of stock represents a unit of ownership. Tony and Suzle will act as co-presidents of the company. The following transactions occur from July 1 through December 31 Jul. 1 Sell $17,000 of common stock to Suzie. Jul, 1 Sell $17,000 of common stock to Tony. Jul. 1 Purchase a one-year Insurance policy for $3,720 (5310 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,900 associated with Incorporation Jul. 4 Purchase office supplies of $1,900 on account. Jul. 7 Pay for advertising of $310 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $70 on the day of the clinic. Jul. 8Purchase 10 mountain bikes, paying $10,300 cash. ul. 15 On the day of the clinic, Great Adventures receives cash of $4,200 from 60 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 14,650. Jul. 24 Pay 58to to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $120 in advance or $170 on the day of the clinic. Jul. 30 Great Adventures receives cash of $8,400 in advance from 70 kayakers for the upcoming kayak clinic. Aug. 1 Great Adventures obtains a $39,000 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. Aus 4 The company purchases 14 kayaks, paying $18,700 cash. Aug. 10 Twenty additional kayakers pay $3,400 (5178 each). In addition to the $8,400 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 $11,100 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 for one year, paying $3,960 (5930 per month) in advance. Sep. 21 Tony conducts a rock climbing clinic. The company receives $13,500 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 company's 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 $650. 5 To help organize and promote the race, Tony hires his college room salary for each team that competes in the Dec altimeters, use a compass, and orient through heavily wooded areas. The company receives $18,50 Dec. 1 Tony decides to hold the company's 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 cach team is $650. Dec. 5 To help organize and promote the race, Tony hires his college roommate, victor. Victor will be paid 560 in salary for each team that competes in the race. Mis salary will be paid after the race. Dec. 8 The company pays $1,200 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 $26,000 cash from a total of forty teams, and the race is held. Dec. 16 The company pays Victor's salary of $2,400. Dec. 31 The company pays a dividend of $5,000 (52,500 to Tony and $2,500 to Suzie) Dec. 31 using his personal money, Tony purchases a diamond ring for 54,300. Tony surprises Suzle 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, 2021 a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,600. 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 $1,900 of office supplies purchased on July 4, $340 remains e. Interest expense on the $39.000 loan obtained from the city council on August 1 should be recorded. f Of the $2,600 of racing supplies purchased on December 12, $150 remains 9. Suzie calculates that the company owes $14,700 in income taxes. Great Adventures Problem AP3-1 Part 7 7. Post the closing entries of retained earnings to the T-account