Given the following information for Oawa’s Capital Hotel, prepare relevant adjusting entries. Assume that 30th June is the year-end.

a) On 1st June the hotel received $4,000 in advance for services to be rendered. is transaction was recorded on 1st June by debiting bank and crediting unearned service revenue. It was determined that by 30th June, 25 per cent of the service paid for had been provided.

b) On 1st May six months’ insurance premium was purchased for $1,800.

When the payment was made, the hotel debited prepaid insurance and credited bank.

c) The hotel has an investment that is earning a return of $2,400 interest per annum. e last interest payment was received on 30th April. e accounting records need to be adjusted to reflect the last two months of interest accrued.

d) In the current financial year, the hotel’s supplies account had an opening balance of $600. $7,000 of supplies have been purchased during the year and debited to the supplies account. A year-end stock-take has revealed $400 of supplies in stock. During the year no accounting entries reflective of supplies usage have been made.