The accounting records of Blue Mountain Resort are maintained on the basis of a fiscal year ending April 30. The following facts are to be used for making adjusting entries at April 30. LO8

(1) Depreciation expense on the buildings for the year ended April 30 amounted to

$42,375.

(2) A 36-month fire insurance policy had been purchased on April 1. The premium of

$4,320 for the entire life of the policy had been paid on April 1 and recorded as Unexpired Insurance.

(3) A portion of the land owned had been leased on April 16 of the current year to a service station operator at a yearly rental rate of $12,000. One year’s rent was collected in advance at the date of the lease and credited to Unearned Rental Revenue.

(4) A bus to carry guests to and from the airport had been rented beginning early on April 19 from Truck Rentals, Inc., at a daily rate of $60. No rental payment had yet been made.

(5) Among the assets owned by Blue Mountain Resort were government bonds in the face amount of $75,000. Accrued interest receivable on the bonds at April 30 was computed to be $2,925.

(6) A three-month bank loan in the amount of $300,000 had been obtained on April 1. No interest has yet been paid or recorded. Interest accrued at April 30 is

$3,000.

(7) The company signed an agreement on April 30 to lease a truck from Ace Motors for a period of one year beginning May 1 at a rate of 30 cents a mile and with a clause providing for a minimum monthly charge of $900.

(8) Salaries earned by employees but not yet paid amounted to $9,900.

Instructions For each of the above paragraphs which warrants adjustment of the accounts, you are to prepare an adjusting journal entry. Include an explanation as part of each entry.