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 34,000 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 folloding transactions occur from July 1 through December 31 Jul. 1 Sell $17,000 of common stock to Sutie. bol. 1 sell $17,000 of common stock to Tony. 1 Purchase a one-year Insurance policy for $), 720 (5320 per month) to cover injuries to participants during outdoor clinics 31. 2. Pay legal fees of $1,900 associated with incorporation 3 4 Purchase office supplies of $1,900 on account. Jul. 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 Jui & Purchase 10 mountain bikes, paying $10,300 cash. Jul 15 on the day of the clinic, Great Adventures receives cash of $4,200 from 60 bikers. Tony conduct the mountain biking clinic Jul. 22 decause of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives 14,650. Gul 14 Pay 5000 to local radio station for advertising to appear inediately. 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 fron 70 Kayakers for the upcoming kayak clinic. Aog. 1 Great Adventures obtains a 339,000 low-interest loan for the company from the city council, which has recently pasted an initiative encouraging business development related to outdoor activities. The loan is due in three years, and annual Interest is due each year on July 31. Aug 4 The company purchases 14 kayaks, paying $13,700 cash Aug. 18 Twenty additional kayakers pay 53,400 (5170 cach), In addition to the $8,400 that was paid in advance on July 30, on the day of the clinic. Tory conducts the first kayak clinic Aug 17 Tony conducts & Second kayak clinic, and the company receives 311,100 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 33,960 (5330 per month) in advance. Sep. 21 Tony conducts a rock climbing clinic. The company receives $13,500 cash. Oct 17 Tony. condutan 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 on altineter, use a compass, and orient through heavily wooded areas. The company receives $18,500 cash, Dec, 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. Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $60 in salary for each team that competes in the race. His salary will be paid after the race. Dec. & 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 $26,800 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 ($2,500 to Tony and $2,500 to Suzie) Dec. 31 Using his personal money, Tony purchases a diamond ring for $4,800 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, 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 1has 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 1. Of the $2,600 of racing supplies purchased on December 12, S150 remains 9. Suzie calculates that the company owes $14.700 in income taxes. Great Adventures Problem AP3-1 Part 3 3. Post transactions from July 1 through December 31 and adjusting entries on December 31 to T-accounts Cash Prepaid Insurance Beg Bal Beg Bal