Question

In: Accounting

The accounting records of Timberline Lodge are maintained on the basis of a fiscal year ending...

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 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.

Solutions

Expert Solution

  • Adjusting entry is required to record the revenue that has been earned but not yet received.
  • Question states that the bus has been rented for 12 days in April, but no rental payments have been received.

Hence, rental revenue for 12 days in April is earned but not received.

Rental Income receivable = 12 days x $ 60 per day = $ 720

  • Adjustment entry for the same will be:

Date

Accounts title

Debit

Credit

30-Apr

Accounts receivables

$                                         720.00

   Rental revenue

$                        720.00

(Rent earned but not received, recorded)

ekkarill92 answered 1 year ago
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