Reference no: EM132489110

Problem - Recording Adjusting Entries

Lamar Marina repairs, stores, and cleans boats for customers. It is completing the accounting process for the year just ended, November 30, 2019. The transactions during 2019 have been journalized and posted. The following data with respect to adjusting entries are available:

a. Lamar borrowed $325,000 at a 12 percent annual interest rate on April 1, 2019, to expand its boat storage facility. The loan requires Lamar's to pay the interest quarterly until the note is repaid in three years. Lamar paid quarterly interest on July 1 and October 1.

b. The Young family paid Lamar $3,240 on November 1, 2019, to store its sailboat for the winter until May 1, 2020. Lamar credited the full amount to Unearned Storage Revenue on November 1.

c. Lamar used boat-lifting equipment that cost $250,000; $25,000 was the estimated depreciation for 2019.

d. Boat repair supplies on hand at December 1, 2018, totaled $17,500. Repair supplies purchased and debited to Supplies during the year amounted to $44,000. The year-end count showed $10,400 of the supplies on hand.

e. Wages earned by employees during November 2019, unpaid and unrecorded at November 30, 2019, amounted to $3,950. The next payroll date will be December 5, 2019.

Required -

1. Identify each of these transactions as a deferred revenue, deferred expense, accrued revenue, or accrued expense.

2. Prepare the adjusting entries that should be recorded for Lamar at November 30, 2019.