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The Highland Cove Resort has a May 31 fiscal year end and prepares adjusting entries on a monthly basis. The following trial balance was prepared
The Highland Cove Resort has a May 31 fiscal year end and prepares adjusting entries on a monthly basis. The following trial balance was prepared before recording the May 31 month-end adjustments:
Prepare and post adjusting entries, and prepare adjusted trial balance and financial statements.
HIGHLAND COVE RESORT Trial Balance May 31, 2021 | ||||
Debit | Credit | |||
Cash | $ 17,520 | |||
Prepaid insurance | 1,590 | |||
Supplies | 995 | |||
Land | 35,000 | |||
Building | 150,000 | |||
Accumulated depreciationbuilding | $ 47,750 | |||
Furniture | 33,000 | |||
Accumulated depreciationfurniture | 12,925 | |||
Accounts payable | 8,500 | |||
Unearned revenue | 15,000 | |||
Mortgage payable | 96,000 | |||
K. MacPhail, capital | 85,000 | |||
K. MacPhail, drawings | 42,735 | |||
Service revenue | 246,150 | |||
Depreciation expense | 5,775 | |||
Insurance expense | 5,830 | |||
Interest expense | 5,720 | |||
Repairs expense | 14,400 | |||
Salaries expense | 156,710 | |||
Supplies expense | 4,450 | |||
Utilities expense | 37,600 | |||
$511,325 | $511,325 |
Additional information:
- The company pays $6,360 for its annual insurance policy on July 31 of each year.
- A count shows $560 of supplies on hand on May 31, 2021.
- The building has an estimated useful life of 50 years.
- The furniture has an estimated useful life of 10 years.
- Services related to two thirds of the unearned revenue have been performed.
- The mortgage interest rate is 6.5% per year. Interest has been paid to May 1, 2021.
- Salaries accrued to the end of May were $1,450.
- The May utility bill of $3,420 is unrecorded and unpaid.
Instructions
Prepare and post the monthly adjusting journal entries on May 31.
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