Question

Timberline Lodge (Homework) The accounting records of Timberline Lodge are maintained on the basis of a fiscal year ending April 30. The facts listed below are to be used for making adjusting entries at April 30, 2018. Required: Prepare the adjusting entries needed by Timberline Lodge on April 30, 2018. A bank loan in the amount of $200,000 was obtained on April 1, 2018, by issuing a 15% note payable due in three months. No interest has been paid or recorded. (b) A portion of the land owned by Timberline had been leased on April 16, 2018, to a service state operator at a yearly rental of $12,000. One year's rent was collected in advance at the date of the lease and credited to Unearned Rental Revenue. The lease runs from April 16, 2018 through April 15, 2019. (c) A bus to carry guests to and from the airport had been rented beginning early on April 19 from Truck Rentals, Inc., at a daily rate of $60. No rental payment has yet been made although the bus has been used for 12 days in April. (d) A one-year fire insurance policy was purchased by Timberline on April 1, 2018. The premium of $18,000 for the life of the policy was paid in full on April 1 and recorded as Unexpired Insurance. No entry has yet been made for the one-month period of coverage that has expired. (e) Equipment was acquired some years ago at a cost of $36,000. Depreciation for the year ending April 30, 2018, is based on an assumed useful life of 6 years.

Answer 1

	Date	Dr/Cr	Particulars	Debit $	Credit $
	April 30, 2018	Debit	Interest Expenses	2500
		Credit	Note Payable/Loan payable/Accrued interest		2500
			(To record the interest for the month of April 2018
			=((200,000*15%)/12 month)*1 months
	April 30, 2018	Debit	Unearned rental revenue	493
		Credit	Rental revenue		493
			(To record the lease rental income from 16 April 2018 to 30 April 2018 i.e. for period of 15 days)
			=(12,000/365 days)*15 days
	April 30, 2018	Debit	Rental expenses	720
		Credit	Rental charges payable		720
			(To record the rental charges for 12 for transportation of guest at $ 60 per day)
			=12 days*$ 60
	April 30, 2018	Debit	Insurance expenses	1500
		Credit	Unexpired insurance		1500
			(To record the insurance expenses for the month of April 2018)
			=18,000/12 months*1 months
	April 30, 2018	Debit	Depreciation	6000
		Credit	Equipment		6000
			(To record the depreciation for the current year)
			=36,000/6 years