Exercise 3-10

Waterway Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows.

WATERWAY RESORT

TRIAL BALANCE

AUGUST 31, 2020

Debit Credit

Cash $25,300

Prepaid Insurance 10,200

Supplies 8,300

Land 28,000

Buildings 128,000

Equipment 24,000

Accounts Payable $10,200

Unearned Rent Revenue 10,300

Mortgage Payable 68,000

Common Stock 104,700

Retained Earnings 9,000

Dividends 5,000

Rent Revenue 84,200

Salaries and Wages Expense 44,800

Utilities Expenses 9,200

Maintenance and Repairs Expense 3,600

$286,400 $286,400

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 $445 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 $4,172 was earned prior to August 31.

5. Salaries of $365 were unpaid at August 31.

6. Rentals of $843 were due from tenants at August 31. (Use Accounts Receivable account.)

7. The mortgage interest rate is 8% per year.

Journalize the adjusting entries on August 31 for the 3-month period June 1-August 31. (Round answers to the nearest whole dollar, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

No. Date Account Titles and Explanation Debit Credit

1. Aug. 31

2. Aug. 31

3. (a) Aug. 31

3. (b) Aug. 31

4. Aug. 31

5. Aug. 31

6. Aug. 31

7. Aug. 31

SHOW LIST OF ACCOUNTS

LINK TO TEXT

adjusted trial balance on August 31.

WATERWAY RESORT

Adjusted Trial Balance

Debit Credit

$ $

Totals

$

$