[The following information applies to the questions displayed below.] Tony and S

Question

[The following information applies to the questions displayed below.]

Tony and Suzie graduate from college in May 2018 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, 2018, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 20,000 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.
  
Jul. 1 Sell $10,000 of common stock to Suzie.
Jul. 1 Sell $10,000 of common stock to Tony.
Jul. 1 Purchase a one-year insurance policy for $4,800 ($400 per month) to cover injuries to participants during outdoor clinics.
Jul. 2 Pay legal fees of $1,500 associated with incorporation.
Jul. 4 Purchase office supplies of $1,800 on account.
Jul. 7 Pay for advertising of $300 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $50 the day of the clinic.
Jul. 8    Purchase 10 mountain bikes, paying $12,000 cash.
Jul. 15 On the day of the clinic, Great Adventures receives cash of $2,000 from 40 bikers. Tony conducts the mountain biking clinic.
Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $2,300.
Jul. 24 Pay for advertising of $700 to a local radio station for a kayaking clinic to be held on August 10. Attendees can pay $100 in advance or $150 on the day of the clinic.
Jul. 30 Great Adventures receives cash of $4,000 in advance from 40 kayakers for the upcoming kayak clinic.

____

Required:
1. Record each transaction in July. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Post each transaction to the appropriate T-accounts and calculate the ending balance of each account.

3. Prepare a trial balance. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Stockholders' Equity, Revenue and Expenses.)

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Explanation / Answer

Date Account Title & explanation Debit Credit Amount in $ Amount in $ 2018 Jul-01 Cash 10000 common Stock 10000 To record the selling of common stock to Suzie Jul-01 Cash 10000 common Stock 10000 To record the selling of common stock to Tony Jul-01 Prepaid Insurance 4800 Cash 4800 To record the purchase of one year insurance policy Jul-02 Legal Fees 1500 Cash 1500 To record the payment for legal fees associated with incorparation Jul-04 Office supplies 1800 Accounts Payable 1800 To record the purchase of office supplies on account Jul-07 Advertising expense 300 Cash 300 To record the payment for advertising Jul-08 Mountain Bike 12000 Cash 12000 To record the purchase of 10 Mountain Bike on cash Jul-15 Cash 2000 Service Revenue 2000 To record the service revenue Jul-22 Cash 2300 Service Revenue 2300 To record the service revenue Jul-24 Advertising expense 700 Cash 700 To record the payment for advertising Jul-30 Cash 4000 Unearned revenue 4000 Cash Jul-01 10000 4800 Jul-01 Jul-01 10000 1500 Jul-02 Jul-15 2000 300 Jul-07 Jul-22 2300 12000 Jul-08 Jul-30 4000 700 Jul-24 Total 28300 19300 Total 9000 Ending balance Office Supplies Jul-04 1800 Total 1800 1800 Total 1800 Ending balance Prepaid Insurance Jul-01 4800 Total 4800 4800 Total 4800 Ending balance Mountain Bike Jul-08 12000 Total 12000 12000 Total 12000 Ending balance Accounts payable 1800 Jul-04 Total 1800 1800 Total Ending balance 1800 Unearned Revenue 4000 Jul-30 Total 4000 4000 Total Ending balance 4000 Common Stock 10000 Jul-01 10000 Jul-01 Total 20000 20000 Total Ending balance 20000 Service Revenue 2000 Jul-15 2300 Jul-22 Total 4300 4300 Total Ending balance 4300 Advertising Expense Jul-07 300 Jul-24 700 Total 1000 1000 Total 1000 Ending balance Legal Expense Jul-02 1500 Total 1500 1500 Total 1500 Ending balance Trial Balance Item Description Debit Credit Cash 9000 Office supplies 1800 Prepaid Insurance 4800 Mountain Bikes 12000 Accounts Payable 1800 Unearned Revenue 4000 Common stock 20000 Service Revenue 4300 Advertising expense 1000 Legal expense 1500 Total 30100 30100

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