Answer:
1. The balance in prepaid insurance is a 1-year premium paid on June 1, 2022. 2. An inventory count on August 31 shows Br.1,300 of supplies on hand. 3. Annual depreciation rates are buildings (4%) and equipment (10%). 4. Unearned rent revenue of Br.7,600 should be recognized as revenue prior to August 31. 5. Salaries and wages of Br.750 were unpaid at August 31. 6. Rentals of Br.1,600 were due from tenants at August 31. 7. The mortgage note is dated 1/1/2022. 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. b. Prepare an adjusted trial balance on August 31.
Step-by-step explanation:
a.
Prepaid Insurance:
DR - Insurance Expense: Br.2500
CR - Prepaid Insurance: Br.2500
Supplies:
DR - Supplies Expense: Br.2200
CR - Supplies: Br.2200
Depreciation Expense:
DR - Depreciation Expense - Buildings: Br.2000
DR - Depreciation Expense - Equipment: Br.500
CR - Accumulated Depreciation - Buildings: Br.2000
CR - Accumulated Depreciation - Equipment: Br.500
Unearned Rent Revenue:
DR - Unearned Rent Revenue: Br.7600
CR - Rent Revenue: Br.7600
Salaries and Wages Payable:
DR - Salaries and Wages Expense: Br.750
CR - Salaries and Wages Payable: Br.750
Rent Receivable:
DR - Rent Receivable: Br.1600
CR - Rent Revenue: Br.1600
Interest Expense:
DR - Interest Expense: Br.800
CR - Interest Payable: Br.800
b.
Account Titles Debit Credit
Cash - Br.16,200
Supplies Br.1,300
Prepaid Insurance Br.2,500
Buildings Br.50,000 Br.2,000
Accumulated Depreciation - Buildings - Br.2,000
Equipment Br.20,000 Br.500
Accumulated Depreciation - Equipment - Br.500
Unearned Rent Revenue - Br.7,600
Rent Revenue - Br.9,200
Salaries and Wages Payable Br.750
Interest Payable Br.800
Mortgage Payable Br.80,000
Common Stock - Br.10,000
Retained Earnings Br.7,450
Total Br.103,550 Br.103,550