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

Other data:

1. The balance in prepaid insurance is a one-year premium paid on June 1, 2014.

2. An inventory count on August 31 shows $45 of supplies on hand.

3. Annual depreciation rates are cottages (10%) and furniture (15%). Salvage value is estimated to be 10% of cost.

4. Unearned Rent Revenue of $380 was earned prior to August 31.

5. Salaries of $38 were unpaid at August 31.

6. Rentals of $80 were due from tenants at August 31.

7. The mortgage interest rate is 6% per year.

Instructions

(a) Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.

(b) Prepare an adjusted trial balance on August 31.

Transcribed Image Text:

GONZALEZ RESORT TRIAL BALANCE AUGUST 31, 2014 Credit Debit $ 1,960 Cash 440 Prepaid Insurance Supplies 260 Land 2,000 12,000 1,600 Buildings Equipment Accounts Payable 450 460 Unearned Rent Revenue Mortgage Payable Common Stock Retained Earnings 6,000 9,100 890 Dividends 500 7,620 Rent Revenue Salaries and Wages Expense Utilities Expense Maintenance and Repairs Expense 4,480 920 360 $24,520 $24,520