You may refer to the opening story of Tony and Suzie and their decision to start Great

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Question:

You may refer to the opening story of Tony and Suzie and their decision to start Great Adventures, the first set of transactions for the company in July.

The following transactions occur over the remainder of 2021

Great Adventures obtains a $30,000 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.

The company purchases 14 kayaks, paying $28,000 cash.

Twenty additional kayakers pay $3,000 ($150 each), in addition to the $4,000 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic.

Tony conducts a second kayak clinic, and the company receives $10,500 cash. Office supplies of $1,800 purchased on July 4 are paid in full.

The following information relates to year-end adjusting entries as of December 31, 2021.

1. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,000.

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

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

4. Of the $1,800 of office supplies purchased on July 4, $300 remains.

5. Interest expense on the $30,000 loan obtained from the city council on August 1 should be recorded.

6. Of the $2,800 of racing supplies purchased on December 12, $200 remains.

7. Suzie calculates that the company owes $14,000 in income taxes.

Required:

1. Record transactions from July 1 through December 31

2. Record adjusting entries as of December 31, 2021.

3. Post transactions from July 1 through December 31 and adjusting entries on December 31 to Taccounts.

4. Prepare an adjusted trial balance as of December 31, 2021.

5. For the period July 1 to December 31, 2021, prepare an income statement and statement of stockholders’ equity. Prepare a classified balance sheet as of December 31, 2021.

6. Record closing entries as of December 31, 2021.

7. Post closing entries to T-accounts.

8. Prepare a post-closing trial balance as of December 31,2021.