Answer:
Bramble Resort
Adjusting Journal Entries on August 31:
1. Debit Insurance Expense $2,175
Credit Prepaid Insurance $2,175
To record insurance expense for 3 months.
2. Debit Supplies Expense $6,339
Credit Supplies $6,339
To record supplies expense for the period.
3. Debit Depreciation Expense - Building $1,152
Credit Accumulated Depreciation - Building $1,152
To record depreciation expense for the period.
Debit Depreciation Expense - Equipment $540
Credit Accumulated Depreciation - Equipment $540
To record depreciation expense for the period.
4. Debit Unearned Rent Revenue $3,666
Credit Rent Revenue $3,666
To record rent revenue earned.
5. Debit Salaries Expense $346
Credit Salaries Payable $346
To accrue unpaid salaries.
6. Debit Accounts Receivable $837
Credit Rent Revenue $837
To record rentals due from tenants.
7. Debit Mortgage Interest Expense $1,360
Credit Mortgage Interest Payable $1,360
To record mortgage interest expense for the period.
Explanation:
a) Data and Calculations:
BRAMBLE RESORT TRIAL BALANCE AUGUST 31, 2020
Debit Credit
Cash $23,800
Prepaid Insurance 8,700
Supplies 6,800
Land 28,000
Buildings 128,000
Equipment 24,000
Accounts Payable $8,700
Unearned Rent Revenue 8,800
Mortgage Payable 68,000
Common Stock 103,200
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
$281,900 $281,900
b) Insurance Expense = $8,700 * 3/12 = $2,175
c) Supplies Expense = $6,339 ($6,800 - 461)
d) Depreciation Expense on Buildings = $1,152 ($128,000 - 12,800) * 4%) * 3/12
e) Depreciation Expense on Buildings = $540 ($24,000 -2,400) * 10%) * 3/12
f) Interest on Mortgage = $1,360 (68,000 * 8%) * 3/12
