Gunflint Adventures operates an airplane service that takes fishing parties to a remote lake resort in northern
Question:
Other Information
1. The airplane is being depreciated over a 15-year life with no residual value.
2. Unearned passenger revenue represents advance ticket sales for bookings in July and August at $300 per ticket.
3. Six months' airport rent had been prepaid on May 1.
4. The unexpired insurance is what remains of a 12-month policy purchased on February 1.
5. Passenger revenue earned in June totaled $40,000.
Instructions
a. Determine the following.
1. The age of the airplane in months.
2. The monthly airport rent expense.
3. The amount paid for the 12-month insurance policy on February 1.
b. Prepare the adjusting entries made on June 30 involving the following accounts.
1. Depreciation Expense: Airplane
2. Airport Rent Expense
3. Insurance Expense
4. Passenger Revenue Earned
Step by Step Answer:
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello