Tony and Suzie graduate from college in May 2024 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, theyll 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, 2024, Tony and Suzie organize their new company as a corporation, Great Adventures Incorporated The articles of incorporation state that the corporation will sell 39,000 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.

July 1 Sell $19,500 of common stock to Suzie.

July 1 Sell $19,500 of common stock to Tony.

July 1 Purchase a one-year insurance policy for $5,640 ($470 per month) to cover injuries to participants during outdoor clinics.

July 2 Pay legal fees of $1,000 associated with incorporation.

July 4 Purchase office supplies of $1,600 on account.

July 7 Pay $320 to a local newspaper for advertising to appear immediately for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $40 the day of the clinic.

July 8 Purchase 10 mountain bikes, paying $14,600 cash.

July 15 On the day of the clinic, Great Adventures receives cash of $2,000 in total from 50 bikers. Tony and Suzie conducts the mountain biking clinic.

July 22 Because of the success of the first mountain biking clinic, Tony and Suzie holds another mountain biking clinic and the company receives $2,500.

July 24 Pay $860 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.

July 30 Great Adventures receives total cash of $4,800 in advance from 40 kayakers for the upcoming kayak clinic. The following transactions occur over the remainder of 2024.

August 1 Great Adventures obtains a $32,000 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.

August 4 The company purchases 14 kayaks, paying $15,400 cash.

August 10 Tony and Suzie conduct the first kayak clinic. In addition to the $4,800 that was received in advance from kayakers on July 30, the company receives additional cash of $3,400 from twenty new kayakers on the day of the clinic.

August 17 Tony and Suzie conducts a second kayak clinic, and the company receives $11,100 cash.

August 24 Office supplies of $1,600 purchased on July 4 are paid in full.

September 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $4,680 ($390 per month) in advance.

September 21 Tony and Suzie conduct a rock-climbing clinic. The company receives $15,100 cash.

October 17 Tony and Suzie conduct 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.

December 1 Tony and Suzie decide 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.

December 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $40 in salary for each team that competes in the race. His salary will be paid after the race.

December 8 The company pays $1,600 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense.

December 12 The company purchases racing supplies for $2,400 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.

December 15 The company receives $24,000 cash from a total of forty teams, and the race is held.

December 16 The company pays Victors salary of $1,600. December 31 The company pays a dividend of $3,500 ($1,750 to Tony and $1,750 to Suzie).

December 31 Using his personal money, Tony purchases a diamond ring for $4,000. 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, 2024.

Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,100.

Six months of the one-year insurance policy purchased on July 1 has expired.

Four months of the one-year rental agreement purchased on September 1 has expired.

Of the $1,600 of office supplies purchased on July 4, $390 remains.

Interest expense on the $32,000 loan obtained from the city council on August 1 should be recorded.

Of the $2,400 of racing supplies purchased on December 12, $160 remains.

Suzie calculates that the company owes $13,100 in income taxes. 3.

Post transactions from July 1 through December 31 and adjusting and closing entries on December 31 to T-accounts. 7. Post the closing entries of retained earnings to the T-account.