Question
E3.10 (LO 3) (Adjusting Entries) Greco Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as
E3.10 (LO 3) (Adjusting Entries) Greco Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows.
Greco Resort Trial Balance August 31, 2020 | ||||
Debit | Credit | |||
Cash | $ 19,600 | |||
Prepaid Insurance | 4,500 | |||
Supplies | 2,600 | |||
Land | 20,000 | |||
Buildings | 120,000 | |||
Equipment | 16,000 | |||
Accounts Payable | $ 4,500 | |||
Unearned Rent Revenue | 4,600 | |||
Mortgage Payable | 60,000 | |||
Common Stock | 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 |
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 1August 31. (Omit explanations.)
b. Prepare an adjusted trial balance on August 31.
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