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On 1 December 2013, John and Patty Driver formed a corporationcalled Susquehanna Equipment Rentals. The new corporation was ableto begin operations immediately by purchasing the assets and takingover the location of Rent-It, an equipment rental company that wasgoing out of business. The newly formed company uses the followingaccounts:

  

Cash	Share Capital
Accounts Receivable	Retained Earnings
Prepaid Rent	Dividends
Unexpired Insurance	Income Summary
Office Supplies	Rental Fees Earned
Rental Equipment	Salaries Expense
Accumulated Depreciation: Rental Equipment	Maintenance Expense
Notes Payable	Utilities Expense
Accounts Payable	Rent Expense
Interest Payable	Office Supplies Expense
Salaries Payable	Depreciation Expense
Dividends Payable	Interest Expense
Unearned Rental Fees	Income Taxes Expense
Income Taxes Payable

The corporation performs adjustingentries monthly. Closing entries are performed annually on 31December. During December, the corporation entered into thefollowing transactions:

Dec.	1	Issued to John and Patty Driver 30,000 new shares in exchangefor a total of $300,000 cash.
Dec.	1	Purchased for $220,800 all of the equipment formerly owned byRent-It. Paid $139,000 cash and issued a one-year note payable for$81,800. The notes, plus all 12-months of accrued interest, are due30 November 2013.
Dec.	1	Paid $10,500 to Shapiro Realty as three months’ advance rent onthe rental yard and office formerly occupied by Rent-It.
Dec.	4	Purchased office supplies on account from Modern Office Co.,$1,400. Payment due in 30 days. (These supplies are expected tolast for several months; debit the Office Supplies assetaccount.)
Dec.	8	Received $8,900 cash as advance payment on equipment rental fromMcNamer Construction Company. (Credit Unearned Rental Fees.)
Dec.	12	Paid salaries for the first two weeks in December, $5,000.
Dec.	15	Excluding the McNamer advance, equipment rental fees earnedduring the first 15 days of December amounted to $18,000, of which$12,200 was received in cash.
Dec.	17	Purchased on account from Earth Movers Limited, $600 in partsneeded to repair a rental tractor. (Debit an expense account.)Payment is due in 10 days.
Dec.	23	Collected $2,600 of the accounts receivable recorded on15December.
Dec.	26	Rented a backhoe to Mission Landscaping at a price of $330 perday, to be paid when the backhoe is returned. Mission Landscapingexpects to keep the backhoe for about two or three weeks.
Dec.	26	Paid biweekly salaries, $5,000.
Dec.	27	Paid the account payable to Earth Movers Limited, $600.
Dec.	28	Declared a dividend of 10 cents per share, payable on 15January 2014.
Dec.	29	Susquehanna Equipment Rentals was named, along with MissionLandscaping and Collier Construction, as a co-defendant in a$26,000 lawsuit filed on behalf of Kevin Davenport. MissionLandscaping had left the rented backhoe in a fenced constructionsite owned by Collier Construction. After working hours on 26December, Davenport had climbed the fence to play on parkedconstruction equipment. While playing on the backhoe, he fell andbroke his arm. The extent of the company’s legal and financialresponsibility for this accident, if any, cannot be determined atthis time. ( Note: This event does not require a journal entry atthis time, but may require disclosure in notes accompanying thestatements.)
Dec.	29	Purchased a 12-month public-liability insurance policy for$8,400. This policy protects the company against liability forinjuries and property damage caused by its equipment. However, thepolicy goes into effect on 1 January 2014, and affords no coveragefor the injuries sustained by Kevin Davenport on 26 December.
Dec.	31	Received a bill from Universal Utilities for the month ofDecember, $690. Payment is due in 30 days.
Dec.	31	Equipment rental fees earned during the second half of Decemberamounted to $20,200, of which $16,300 was received in cash.

Data for Adjusting Entries

a.	The advance payment of rent on 1 December covered a period ofthree months.
b.	The annual interest rate on the note payable to Rent-It is 6percent.
c.	The rental equipment is being depreciated by the straight-linemethod over a period of eight years.
d.	Office supplies on hand at 31 December are estimated at$670.
e.	During December, the company earned $4,600 of the rental feespaid in advance by McNamer Construction Co.on 8 December.
f.	As of 31 December, six days’ rent on the backhoe rented toMission Landscaping on 26 December has been earned.
g.	Salaries earned by employees since the last payroll date (26December) amounted to $1,800 at month-end.
h.	It is estimated that the company is subject to an income taxrate of 30 percent of profit before income taxes (total revenueminus all expenses other than income taxes). These taxes will bepayable in 2014.

Prepare closing entries and post to ledger accounts. (Donot round intermediate calculations. Omit the "$" sign in yourresponse.)

Date	General Journal	Debit	Credit
Dec. 31	(Click to select)Rent expenseIncome summarySalariesexpenseUtilities expenseRent fees earnedOffice suppliesexpenseMaintenance expenseAccounts payableDividendsIncome taxesexpense
	(Click toselect)Utilities expenseAccounts payableDividendsRent feesearnedMaintenance expenseSalaries expenseOffice suppliesexpenseIncome taxes expenseRent expenseIncome summary
31	(Click to select)Depreciation expenseInterestexpenseOffice supplies expenseRent expenseAccounts payableUtilitiesexpenseMaintenance expenseIncome taxes expenseSalariesexpenseIncome summary
	(Click toselect)Salaries expenseDepreciation expenseUtilities expenseIncometaxes expenseMaintenance expenseOffice supplies expenseRentexpenseInterest expenseDividendsIncome summary
	(Click toselect)Salaries expenseOffice supplies expenseDepreciationexpenseDividendsRent expenseIncome summaryMaintenance expenseIncometaxes expenseInterest expenseUtilities expense
	(Click to select)RentexpenseUtilities expenseIncome taxes expenseDepreciationexpenseSalaries expenseInterest expenseDividendsMaintenanceexpenseIncome summaryOffice supplies expense
	(Click toselect)Maintenance expenseDividendsSalaries expenseInterestexpenseDepreciation expenseUtilities expenseIncome summaryOfficesupplies expenseIncome taxes expenseRent expense
	(Click to select)RentexpenseMaintenance expenseOffice supplies expenseInterestexpenseSalaries expenseIncome summaryUtilitiesexpenseDividendsDepreciation expenseIncome taxes expense
	(Click toselect)Income summaryMaintenance expenseInterest expenseIncometaxes expenseUtilities expenseSalaries expenseDepreciationexpenseOffice supplies expenseRent expenseDividends
	(Click toselect)Utilities expenseDepreciation expenseOffice suppliesexpenseRent expenseInterest expenseDividendsMaintenanceexpenseIncome taxes expenseIncome summarySalaries expense
	(Click toselect)Income taxes expenseSalaries expenseDepreciationexpenseInterest expenseDividendsOffice supplies expenseIncomesummaryRent expenseUtilities expenseMaintenance expense
31	(Click to select)Salaries payableNotespayableDepreciation expenseRent expenseIncome summaryInterestexpenseIncome taxes expenseRetained earningsAccountsreceivableAccounts payable
	(Click toselect)Salaries payableRetained earningsInterest expenseRentexpenseAccounts receivableIncome taxes expenseIncome summaryNotespayableDepreciation expenseAccounts payable
31	(Click to select)Interest expenseUtilitiesexpenseMaintenance expenseDepreciation expenseRetainedearningsSalaries expenseDividendsOffice supplies expenseRentexpenseIncome taxes expense
	(Click toselect)Interest expenseRetained earningsSalaries expenseMaintenanceexpenseIncome taxes expenseDepreciation expenseUtilitiesexpenseOffice supplies expenseDividendsRent expense