Question

Required information Great Adventures Problem AP3-1 The following information applies to the questions displayed below Tony and Suzie graduate from college in May 2021 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, 2021, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 31,000 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 transactions occur from July 1 through December 31. 1 Sell $15,500 of common stock to Suzie. 1 Sell $15,500 of comeon stock to Tony. 1 Purchase a one-year insurance policy for $4,440 ($370 per month) to cover injuries to participants during outdoor clinics. 2 Pay legal fees of $1,000 associated with incorporation. 4 Purchase office supplies of $1,200 on account. 7 Pay for advertising of $250 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $70 on the day of the c1linic. 8 Purchase 10 mountain bikes, paying $19,100 cash. Jul Jul. Jul Jul. Jul. Jul. Jul. Jul. 15 On the day of the clinic, Great Adventures receives cash of $4,900 from 70 bikers. Tony conducts the mountain biking clinic Jul. 22 Because of the success of the first mountain biking clinic, Tony holds angther mountain biking clinic and the company receives $5,400. Jul. 24 Pay $820 to local radio station for advertising to appear immediately. A kayaking clinic wi11 be held on Jul. 30 Great Adventures receives cash of $10,400 in advance from 80 kayakers for the upcoming kayak clinic. Aug August 10, and attendees can pay $130 in advance or $180 on the day of the clinic. 1 Great Adventures obtains a $43,000 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. 4 The company purchases 14 kayaks, paying $19,800 cash. Aug. Aug. 10 Twenty additional kayakers pay $3,600 ($180 each), in addition to the $10,400 that was paid in advance on July Aug. 17 Tony conducts a second kayak clinic, and the company receives $11,800 cash Aug. 24 office supplies of $1,200 purchased on July 4 are paid in full Sep 30, on the day of the clinic. Tony conducts the first kayak clinic. 1 To provide better storage of mountain bikes and kayaks hen not in use, the company rents a storage shed for one year, paying $2,760 ($230 per month) in advance . Sep. 21 Tony conducts a rock-climbing clinic. The company recelves $15,100 cash Mo

Answer 1

	Great Adventures Inc.
	Journal entries
No.	Date	Accounts	Debit	Credit
1	1-Jul	Cash	15,500
		Common Stock		15,500
2	1-Jul	Cash	15,500
		Common Stock		15,500
3	1-Jul	Prepaid Insurance	4,440
		Cash		4,440
4	2-Jul	Legal fees expense	1,000
		Cash		1,000
5	4-Jul	Supplies (Office)	1,200
		Accounts Payable		1,200
6	7-Jul	Advertising expense	250
		Cash		250
7	8-Jul	Equipment (Bikes)	19,100
		Cash		19,100
8	15-Jul	Cash	4,900
		Service revenue (Clinic)		4,900
9	22-Jul	Cash	5,400
		Service revenue (Clinic)		5,400
10	24-Jul	Advertising expense	820
		Cash		820
11	30-Jul	Cash	10,400
		Deferred Revenue		10,400
12	1-Aug	Cash	43,000
		Notes Payable		43,000
13	4-Aug	Equipment (Kayaks)	19,800
		Cash		19,800
14	10-Aug	Cash	3,600
		Deferred Revenue	10,400
		Service revenue (Clinic)		14,000
15	17-Aug	Cash	11,800
		Service revenue (Clinic)		11,800
16	24-Aug	Accounts Payable	1,200
		Cash		1,200
17	1-Sep	Prepaid Rent	2,760
		Cash		2,760
18	21-Sep	Cash	15,100
		Service revenue (Clinic)		15,100