The following transactions occur over the remainder of the year.

Aug. 1	Great Adventures obtained a $42,000 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.
Aug. 4	The company purchases 14 kayaks, costing $23,400.
Aug. 10	Twenty additional kayakers pay $3,400 ($170 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 $12,200 cash.
Aug. 24	Office supplies of $1,600 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 storage shed, purchasing a one-year rental policy for $3,240 ($270 per month).
Sep. 21	Tony conducts a rock-climbing clinic. The company receives $14,300 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. Clinic fees total $19,800.
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 $640.
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. 8	The company pays $1,400 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	Forty teams pay a total of $25,600 to race. The race is held.
Dec. 16	The company pays Victor's salary of $2,400.
Dec. 31	The company pays a dividend of $3,800 ($1,900 to Tony and $1,900 to Suzie).
Dec. 31	Using his personal money, Tony purchases a diamond ring for $4,100. Tony surprises Suzie by proposing that they get married. Suzie accepts!

The following information relates to year-end adjusting entries as of December 31, 2015.

a. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,700.

b. Six months' worth of insurance has expired.

c. Four months' worth of rent has expired.

d. Of the $1,600 of office supplies purchased on July 4, $330 remains.

e. Interest expense on the $42,000 loan obtained from the city council on August 1 should be recorded.

f. Of the $2,600 of racing supplies purchased on December 12, $210 remains.

g. Suzie calculates that the company owes $13,300 in income taxes.

Assume the following ending balances for the month of July.

	Balance
Cash	$23,320
Prepaid insurance	4,680
Supplies (Office)	1,600
Equipment (Bikes)	16,900
Accounts payable	1,600
Unearned revenue	8,400
Common stock	32,000
Service revenue (Clinic)	7,400
Advertising expense	1,000
Legal fees expense	1,900

1. Record transactions from August 1 through December 31.

2. Record adjusting entries as of December 31, 2015.

Answer rating: 100% (QA)

1 Record Transactions Aug 1 Debit Cash 42000 Credit Unearned Revenue 42000 Aug 4 Debit Equipment Bik... View the full answer