E3-10 (L03) (Adjusting Entries) Greco Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows.

Other data:
1. The balance in prepaid insurance is a one-year premium paid on June 1, 2017.
2. An inventory count on August 31 shows $450 of supplies on hand.
3. Annual depreciation rates are buildings (4%) and equipment (10%). Salvage value is estimated to be 10% of cost.
4. Unearned Rent Revenue of $3,800 was earned prior to August 31.
5. Salaries of $375 were unpaid at August 31.
6. Rentals of $800 were due from tenants at August 31.
7. The mortgage interest rate is 8% per year.
Instructions

(a) Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31. (Omit explanations.)

(b) Prepare an adjusted trial balance on August 31.

Transcribed Image Text:

GRECO RESORT TRIAL BALANCE AUGUST 31, 2017 Debit Credit Cash $ 19,600 Prepaid Insurance Supplies Land Buildings Equipment 4,500 2,600 20,000 120,000 16,000 Accounts Payable Unearned Rent Revenue Mortgage Payable Common Stock $ 4,500 4,600 60,000 91,000 Retained Earnings 9,000 Dividends 5,000 Rent Revenue 76,200 Salaries and Wages Expense 44,800 Utilities Expenses 9,200 Maintenance and Repairs Expense 3,600 $245,300 $245,300