Question

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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.)

Answer 1

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