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, 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, 2024, Tony and Suzie organize their new company as a corporation, Great Adventures Incorporated 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 following business activities occur during July for Great Adventures. July 1 Sell $17,000 of connon stock to Suzie. July 1 Sell $17,000 of common stock to Tony. July 1 Purchase a one-year insurance policy for $4,440 ( $370 per month) to cover injuries to July 2 participants during outdoor clinics. July 4 Purchase office supplies of $1,700 on account. July 7 Pay $360 to a local newspaper for advertising to appear inmediately for an upcoming nountain biking clinic to be held on July 15 . Attendees will be charged $50 the day of the clinic. Purchase 10 mountain bikes, paying $18,200 cash. on the day of the clinic, Great Adventures receives cash of $4,000 in total from 80 bikers. Tony and Suzie conducts the mountain biking clinic. Because of the success of the first mountain biking clinic, Tony and Suzie holds another nountain biking clinic and the company receives $4,40. Pay $750 to a local radio station for advertising to appear inmediately. A kayaking clinic will be held on August 10, and attendees can pay $100 in advance or $150 on the day of the clinic. Great Adventures receives total cash of $7,000 in advance from 70 kayakers for the upcoming kayak clinic. The following transactions occur over the renainder of 2024. August 1 Great Adventures obtains a $42,000 low-interest loan for the company fron the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 68 annual interest is due each year on July 31. The company purchases 14 kayaks, paying $19,500 cash. Tony and Suzie conduct the first kayak clinic. In additiof to the \$7,000 that was received in advance from kayakers on July 30 , the company receives adeitional cash of $3,000 from twenty new kayakers on the day of the clinic. Tony and Suzie conducts a second kayak clinic, and the company receives $12,500 cash. office supplies of $1,700 purchased on July 4 are paid in futl. To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $3,480 ( $290 per month) in advance. August 4 August 10 August 17 August 24 Septenber 1 July 8 July 15 July 22 July 24 July 30 storageshedforoneyear,paying$3,480($290permonth)inadvance. August 24 Office supplies of $1,700 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 $3,480 ( $29 a per month) in advance. September 21 Tony and Suzie conduct a rock-climbing clinic. The company receives $13,600 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 $18,000 cash. December 1 Tony and Suzie decide 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 al checkpoints in order wins. The entry fee for each tean is $690. Decenber 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. Decenber 8 The conpany pays $1,200 to purchase a permit from a state park where the race will be held. The anount is recorded as a misceltaneous expense. Dece-ber 12 The conpany purchases racing supplies for $2,400 on account due in 30 days. Supplies include trophies for the top-finishing teans in each category, pronotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse. Decenber 15 The company receives $27,600 cash from a total of forty teams, and the race is held. December 16 The company pays Victor's salary of $2,000. Decenber 31 The company pays a dividend of $4,700 ( $2,350 to Tony and $2,350 to $uzie). December 31 Using his personal money. Tony purchases a diamond ring for $4,200. 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. a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $7,600. 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 $1,700 of office supplies purchased on July 4,$360 remains. e. Interest expense on the $42,000 loan obtained from the city council on August 1 should be recorded. f. Of the $2,400 of racing supplies purchased on December 12,$180 remains. g. Suzie calculates that the company owes $13,200 in income taxes. \begin{tabular}{|l|l|l|} \hline \multicolumn{2}{|c|}{ GREAT ADVENTURES, INCORPORATED } \\ \hline \multicolumn{1}{|c|}{ Accounts } \\ \hline \multicolumn{1}{|c|}{ December 31,2024} \\ \hline Cash & & \\ \hline Prepaid Insurance & & \\ \hline Prepaid Rent & & \\ \hline Supplies (Office) & & \\ \hline Supplies (Racing) & \\ \hline Equipment (Bikes) & & \\ \hline Equipment (Kayaks) & \\ \hline Accumulated Depreciation & \\ \hline Accounts Payable & \\ \hline Income Tax Payable & \\ \hline Interest Payable & \\ \hline Notes Payable & \\ \hline Common Stock & \\ \hline Retained Earnings & \\ \hline Dividends & \\ \hline Service Revenue (Clinic) & \\ \hline Service Revenue (Racing) & \\ \hline Advertising Expense & \\ \hline Depreciation Expense & \\ \hline Income Tax Expense & \\ \hline Insurance Expense & \\ \hline Interest Expense & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline Equipment (Bikes) & p & 7 \\ \hline Equipment (Kayaks) & p & \\ \hline Accumulated Depreciation & 7 & \\ \hline Accounts Payable & & \\ \hline Income Tax Payable & p & P \\ \hline Interest Payable & p & \\ \hline Notes Payable & p & \\ \hline Common Stock & & \\ \hline Retained Earnings & p & \\ \hline Dividends & & \\ \hline Service Revenue (Clinic) & & \\ \hline Service Revenue (Racing) & & \\ \hline Advertising Expense & & \\ \hline Depreciation Expense & & \\ \hline Income Tax Expense & & 7 \\ \hline Insurance Expense & & ? \\ \hline Interest Expense & & 7 \\ \hline Legal Fees Expense & & 7 \\ \hline Miscellaneous Expense & & \\ \hline Rent Expense & & \\ \hline Salaries Expense & & 7 \\ \hline Supplies Expense (Office) & & 7 \\ \hline Supplies Expense (Racing) & & \\ \hline Totals & 0 & $ \\ \hline \end{tabular}