Alta sequoia resort adjust its accounts monthly and closes its account annually. most guest of the resort pay at time they check out and the amounts collected are credited to rental revenue. a few guest pay in advance for rooms, & these amounts are credited to unearned rental revenue at the time of receipt. The following information is available as a source for preparing adjusting entries at December 31;
A. Salaries earned by employees but not yet recorded or paid amount to $7900.
B. As of December 31, Alta sequoia has earned $11075 rental revenue from current guest who will not be billed until they are ready to check out.
C. On Nov 1 a suite of rooms was rented to a corporation for six months at a monthly rental of $3200. The entire 6 months rent of $19200 was collected in advance and credited to unearned rental revenue.
D. A limousine to carry guest to and from the airport had been rented beginning Dec 19 from transport rentals, Inc., at a daily rate of $120. No rental payment has yet been made.
E. A 6 months loan in the amount of $30000 had been obtained on DEC 1 interest is to be computed at a rate of 10% per year and is payable when the loan is due no interest has been paid and no interest expense has been recorded.
F. Depreciation on the resorts building is based on an estimated useful life of 30 years the original cost of the building was $1755000 Alta sequoia uses the straight-line method.
G. In DEC Alta sequoia resort entered into an agreement to host the annual symposium of ACE in the April of next year the resort expects to rental revenue of at least $45000.
H. A 1 year fire insurance policy had been purchased on Sept 1. The premium of $7200 for the entire life of the policy had been paid on sept 1 and recorded as unexpired insurance.