Answer:
GRECO RESORT
a) Journal Entries on August 31:
1. Debit Insurance Expense $1,125
Credit Prepaid Insurance $1,125
2. Debit Supplies Expense $2,150
Credit Supplies $2,150
3. Debit Depreciation Expense-Buildings $4,800
Credit Accumulated Depreciation - Buildings $4,800
Debit Depreciation Expense- Equipment $1,440
Credit Accumulated Depreciation- Equipment $1,440
4. Debit Unearned Rent Revenue $3,800
Credit Rent Revenue $3,800
5. Debit Salaries Expense $375
Credit Salaries Expense Payable $375
6. Debit Accounts Receivable $800
Credit Rent Revenue $800
7. Debit Mortgage Interest Expense $1,200
Credit Mortgage Interest Payable $1,200
b. GRECO RESORT
Adjusted TRIAL BALANCE
AUGUST 31, 2017
Debit Credit
Cash $19,600
Accounts Receivable 800
Prepaid Insurance 3,375
Supplies 450
Land 20,000
Buildings 120,000
Equipment 16,000
Accounts Payable $4,500
Mortgage Interest Payable 1,200
Unearned Rent Revenue 800
Mortgage Payable 60,000
Common Stock 91,000
Retained Earnings 9,000
Accumulated Depreciation-Buildings 4,800
Accumulated Depreciation-Equipment 1,440
Dividends 5,000
Rent Revenue 80,800
Salaries & Wages Expense Payable 375
Salaries and Wages Expense 45,175
Utilities Expenses 9,200
Maintenance & Repairs Expense 3,600
Insurance Expense 1,125
Supplies Expense 2,150
Depreciation Expense- Buildings 4,800
Depreciation Expense- Equipment 1,440
Mortgage Interest Expense 1,200
Total $ 253,915 $253,915
Explanation:
a) Data and Calculations:
GRECO RESORT
TRIAL BALANCE
AUGUST 31, 2017
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 & Repairs Expense 3,600
Total $ 245,300 $245,300
b) Mortgage Interest Expense = $60,000 * 8% * 3/12 = $1,200
