Journalize the adjusting entries on august for monty resort

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Reference no: EM131920419

Problem

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

MONTY RESORT TRIAL BALANCE AUGUST 31, 2017
	Debit	Credit
Cash	$25,900
Prepaid Insurance	10,800
Supplies	8,900
Land	22,000
Buildings	122,000
Equipment	18,000
Accounts Payable		$10,800
Unearned Rent Revenue		10,900
Mortgage Payable		62,000
Common Stock		99,300
Retained Earnings		9,000
Dividends	5,000
Rent Revenue		78,200
Salaries and Wages Expense	44,800
Utilities Expenses	9,200
Maintenance and Repairs Expense	3,600
Totals	$270,200	$270,200

Other data:

1. The balance in prepaid insurance is a one-year premium paid on June 1, 2017.

2. An inventory count on August 31 shows $443 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 $3,472 was earned prior to August 31.

5. Salaries of $392 were unpaid at August 31.

6. Rentals of $873 were due from tenants at August 31. (Use Accounts Receivable account.)

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

Required

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

Prepare an adjusted trial balance on August 31.

Reference no: EM131920419

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