Question

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

SPLISH RESORT TRIAL BALANCE AUGUST 31, 2020
		Debit			Credit
Cash		$26,800
Prepaid Insurance		11,700
Supplies		9,800
Land		28,000
Buildings		128,000
Equipment		24,000
Accounts Payable					$11,700
Unearned Rent Revenue					11,800
Mortgage Payable					68,000
Common Stock					106,200
Retained Earnings					9,000
Dividends		5,000
Rent Revenue					84,200
Salaries and Wages Expense		44,800
Utilities Expenses		9,200
Maintenance and Repairs Expense		3,600
		$290,900			$290,900

Other data:

1.		The balance in prepaid insurance is a one-year premium paid on June 1, 2020.
2.		An inventory count on August 31 shows $444 of supplies on hand.
3.		Annual depreciation rates are (a) buildings (4%) (b) equipment (10%). Salvage value is estimated to be 10% of cost.
4.		Unearned Rent Revenue of $3,664 was earned prior to August 31.
5.		Salaries of $340 were unpaid at August 31.
6.		Rentals of $746 were due from tenants at August 31. (Use Accounts Receivable account.)
7.		The mortgage interest rate is 8% per year.

(a)

Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31. (Round answers to the nearest whole dollar, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Aug. 31
2.	Aug. 31
3. (a)	Aug. 31
3. (b)	Aug. 31
4.	Aug. 31
5.	Aug. 31
6.	Aug. 31
7.	Aug. 31

Answer 1

1. Insurance expense for 3 months = 11,700x 3/12

= $2,925

2. Supplies expense = Supplies purchased - Supplies remaining

= 9,800-444

= $9,356

3. Quarterly depreciation on building = 128,000 x 4% x 3/12

= $1,280

Quarterly depreciation on equipment = 24,000 x 10% x 3/12

= $600

7. Interest expense on mortgage = 68,000 x 8% x 3/12

= $1,360

No.	Date	Account Titles and Explanation	Debit	Credit
1.	Aug. 31	Insurance expense	2,925
		Prepaid insurance		2,925
2.	Aug. 31	Supplies expense	9,356
		Supplies		9,356
3. (a)	Aug. 31	Depreciation expense	1,280
		Accumulated depreciation- Building		1,280
3. (b)	Aug. 31	Depreciation expense	600
		Accumulated depreciation- Equipment		600
4.	Aug. 31	Unearned rent revenue	3,664
		Rent revenue		3,664
5.	Aug. 31	Salaries and wages expense	340
		Salaries and wages payable		340
6.	Aug. 31	Accounts receivable	746
		Rent revenue		746
7.	Aug. 31	Interest expense	1,360
		Interest payable		1,360

Kindly comment if you need further assistance. Thanks‼!