Exercise 3-10 (Part Level Submission)

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, 2014
		Debit			Credit
Cash		$18,827
Prepaid Insurance		4,627
Supplies		2,827
Land		27,000
Buildings		127,000
Equipment		23,000
Accounts Payable					$4,727
Unearned Rent Revenue					4,827
Mortgage Payable					67,000
Common Stock					91,227
Retained Earnings					14,900
Dividends		5,000
Rent Revenue					83,200
Salaries and Wages Expense		44,800
Utilities Expenses		9,200
Maintenance and Repairs Expense		3,600
Totals		$265,881			$265,881

Other data:

1.		The balance in prepaid insurance is a one-year premium paid on June 1, 2014.
2.		An inventory count on August 31 shows $682 of supplies on hand.
3.		Annual depreciation rates are (a) buildings (4%) (b) equipment (10%). Salvage value is estimated to be 10% of cost.
4.		Unearned Rent Revenue of $3,912 was earned prior to August 31.
5.		Salaries of $400 were unpaid at August 31.
6.		Rentals of $842 were due from tenants at August 31. (Use Accounts Receivable account.)
7.		The mortgage interest rate is 8% per year.

QUESTION1

Journalize the adjusting entries on August 31 for the 3-month period June 1