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, 2020.

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, 2020 Debit Credit $ 19,600 Cash Prepaid Insurance Supplies Land 4,500 2,600 20,000 Buildings Equipment Accounts Payable 120,000 16,000 $ 4,500 Unearned Rent Revenue 4,600 Mortgage Payable Common Stock 60,000 91,000 Retained Earnings 9,000 Dividends 5,000 Rent Revenue 76,200 Salaries and Wages Expense Utilities Expenses Maintenance and Repairs Expense 44,800 9,200 3,600 $245,300 $245,300