Evergreen Retail Company, whose fiscal year end is December 31, had the following transactions in its first year of operations:

1. Issued common shares for $65,000 cash on January 1, 2020.

2. Borrowed $15,000 of additional financing from the bank on January 1, 2020.

3. Bought equipment for $25,000 cash, also on January 1, 2020.

4. Made $60,000 of inventory purchases on account.

5. Had total sales of $92,000, of which $28,000 were on account. The cost of the products sold was $44,000.

6. Bought supplies for $800 cash.

7. Collected payments of $24,000 from customers on their accounts.

8. Paid suppliers $25,000 for the inventory that had been purchased on account.

9. Paid employees $36,200.

10. Paid the interest on the bank loan on December 31, 2020. The interest rate was 8%.

11. Declared dividends of $2,000, which will be paid in 2021.

Information for adjusting entries:

12. The equipment purchased on January 1 has an estimated useful life of eight years and an estimated residual value of $1,000 at the end of its life.

13. Supplies costing $200 were still on hand at the end of the year.

14. Wages in the amount of $800 were owed to employees at the end of the year. These will be paid early in 2021.

Required

a. Prepare journal entries for transactions 1 through 11.

b. Prepare adjusting journal entries for adjustments 12 to 14.

c. Set up T accounts, post the 2020 entries, and calculate the balance in each account.

d. Prepare a trial balance, and ensure that the total of the debit balances is equal to the total of the credit balances.

e. Prepare the closing entries, post them to the T accounts, and calculate the final balance in each account.