After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2015, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2015) follows.

Business Solutions had the following transactions and events in December 2015.

Dec. 2 Paid $945 cash to Hillside Mall for Business Solutions’ share of mall advertising costs.

3 Paid $470 cash for minor repairs to the company’s computer.

4 Received $4,050 cash from Alex’s Engineering Co. for the receivable from November.

10 Paid cash to Lyn Addie for six days of work at the rate of $110 per day.

14 Notified by Alex’s Engineering Co. that Business Solutions’ bid of $7,400 on a proposed project has been accepted. Alex’s paid a $2,400 cash advance to Business Solutions.

15 Purchased $2,000 of computer supplies on credit from Harris Office Products.

16 Sent a reminder to Gomez Co. to pay the fee for services recorded on November 8.

20 Completed a project for Liu Corporation and received $6,375 cash.

22–26 Took the week off for the holidays.

28 Received $3,000 cash from Gomez Co. on its receivable.

29 Reimbursed S. Rey for business automobile mileage (600 miles at $0.32 per mile).

31 The company paid $1,100 cash in dividends.

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company’s first three months:

a. The December 31 inventory count of computer supplies shows $600 still available.

b. Three months have expired since the 12-month insurance premium was paid in advance.

c. As of December 31, Lyn Addie has not been paid for four days of work at $110 per day.

d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.

e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.

f. Three of the four months' prepaid rent has expired.

Required:

1. Prepare journal entries to record each of the December transactions and events for Business Solutions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2.1 Prepare adjusting entries to reflect a through f.

2.2 Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger.

3. Prepare an adjusted trial balance as of December 31, 2015.

4. Prepare an income statement for the three months ended December 31, 2015.

5. Prepare a statement of owner’s equity for the three months ended December 31, 2015..

6. Prepare a balance sheet as of December 31, 2015.

7. Record and post the necessary closing entries for Business Solutions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

8. Prepare a post-closing trial balance as of December 31, 2015.