Question

Question #2: Use FSET to record adjusting entries on August 31st for the 3-month period June 1-August 31 Trial Balance August 31 Debit Credit Cash $ 24,600 4,300 Supplies Prepaid Insurance 5,400 Land 40,000 Buildings 132,000 36,000 S 6,500 Equipment Accounts Payable Unearned Rent Revenue Mortgage Payable 6,800 120,000 100,000 Common Stock Dividends 5,000 80,000 53,000 Rent Revenue Salaries and Wages Expense Utilities Expense Maintenance and Repairs Expense 9,400 3,600 $313,300 $313,300 Other data: 1. Insurance expires at the rate of $500 per month. 2. A count of supplies on August 31 shows $900 of supplies on hand. 3. Annual depreciation is $6,600 on buildings and 54,000 on equipment. 4. Unearned rent of $4,000 was earned prior to August 31. 5. Salaries of $600 were unpaid at August 31. 6. Rentals of $1,600 were due from tenants at August 31. (Use Accounts Receivable.) 7. The mortgage interest rate is 6% per year. (The mortgage was taken out August 1.)

Please use the financial statement effects template below to answer the question. Thanks!

Answer 1

Financial effect

Transaction	Cash asset	+	Non Cash assets	=	Liabilities	+	Contrib Cap	+	Earned Cap	Revenue	-	Expenses	=	Net income
1			-1500						-1500			+1500		-1500
2			-3400						-3400			+3400		-3400
3			-2650						-2650			+2650		-2650
4					-4000				4000	4000				4000
5					600				-600			+600		-600
6			1600						1600	1600				1600
7					600				-600			+600		-600