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

GRECO RESORT TRIAL BALANCE AUGUST 31, 2014 Debit Credit 

Cash $ 19,600 

Prepaid Insurance 4,500 

Supplies 2,600 

Land 20,000 

Buildings 120,000 

Equipment 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 and Wages Expense 44,800 Utilities Expenses 9,200 

Maintenance and Repairs Expense 3,600 $245,300 $245,300 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 $450 of supplies on hand. 

3. Annual depreciation rates are buildings (4%) and equipment (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 interest rate is 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.

Answer rating: 100% (QA)

a Adjusting Entries Date Accounts title Debit Credit August 312014 Insurance expense 112500 Prepaid insurance 112500 4500312 August 312014 Supplies ex... View the full answer