Reference no: EM132953315
Question - The trial balance of Highland Cove Resort on August 31, 2020, includes the following selected accounts before adjusting entries:
DEBIT CREDIT
Prepaid Insurance $4,240
Supplies 995
Buildings 150,000
Furniture 33,000
Mortgage Payable $96,000
Unearned Revenue 15,000
Rent Revenue 246,150
Salaries Expense 153,000
Utilities Expense 37,600
An analysis of the accounts shows the following:
-The company pays $6,360 for its annual insurance policy on March 31 of each year.
-A count shows $560 of supplies on hand on August 31, 2020.
-Customers must pay a $100 deposit if they want to book a room during peak times. An analysis of these bookings indicates that 150 deposits were received (all credited to Unearned Revenue) and only 40 of the deposits have not yet been earned by August 31, 2020.
-The buildings have an estimated useful life of 50 years.
-The furniture has an estimated useful life of 10 years.
-The mortgage interest rate is 6.5% per year. Interest has been paid to August 1, 2020.
-Salaries accrued to the end of August were $1,450.
-The August utility bill of $3,420 is unrecorded and unpaid.
-As of August 31, Highland Cove has earned $1,350 of rent revenue from customers who are currently renting rooms but will not pay the amount owing until they check out in September.
Instructions - Prepare the adjusting entries for the month of August using the general journal below. Please show me in the particular section how you calculated.