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

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Accounting

The accounting records of Timberline Lodge are maintained on thebasis of a fiscal year ending April 30. The facts listed below areto be used for making adjusting entries at April 30, 2018.
Required: Prepare the adjusting entries needed by TimberlineLodge on April 30, 2018.
A bus to carry guests to and from the airport had been rentedbeginning early on
April 19 from Truck Rentals, Inc., at a daily rate of $60. Norental payment has
yet been made although the bus has been used for 12 days inApril.

Answer & Explanation Solved by verified expert

4.2 Ratings (504 Votes)

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)

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Transcribed Image Text

The accounting records of Timberline Lodge are maintained on thebasis of a fiscal year ending April 30. The facts listed below areto be used for making adjusting entries at April 30, 2018.Required: Prepare the adjusting entries needed by TimberlineLodge on April 30, 2018.A bus to carry guests to and from the airport had been rentedbeginning early onApril 19 from Truck Rentals, Inc., at a daily rate of $60. Norental payment hasyet been made although the bus has been used for 12 days inApril.