Greco 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, 2008.

2. An inventory count on August 31 shows $450 of supplies on hand.

3. Annual depreciation rates are cottages (4%) and furniture (10%). Salvage value is estimated to be 10% of cost.

4. Unearned Rent Revenue of $3,800 was earned prior to August 31.

5. Salaries of $375 were unpaid at August 31.

6. Rentals of $800 were due from tenants at August 31.

7. The mortgage (dated June 1, 2008) has an interest rate of 8% per year.

Instructions

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

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

Transcribed Image Text:

Greco Resort Trial Balance August 31, 2008 Debit Credit Cash $ 19,600 Prepaid Insurance 4,500 Supplies 2,600 Land 20,000 Cottages 120,000 Furniture 16,000 Accounts Payable $ 4,500 Unearned Rent Revenue 4,600 Mortgage Payable 60,000 Common Stock 91,000 Retained Earnings 9,000 Dividends 5,000 Rent Revenue 76,200 Salaries Expense Utilities Expense 44,800 9,200 Repair Expense 3,600 $245,300 $245,300