Enchanted Forest, a large campground in South Carolina, adjusts its accounts monthly. Mostguests of the campground pay at the time they check out, and the amounts collected are creditedto Camper Revenue. The following information is available as a source for preparing the adjustingentries at December 31:1. Enchanted Forest invests some of its excess cash in certificates of deposit (CDs) with its localbank. Accrued interest revenue on its CDs at December 31 is $400. None of the interest hasyet been received. (Debit Interest Receivable.)2. A six-month bank loan in the amount of $12,000 had been obtained on September 1.Interest is to be computed at an annual rate of 8.5 percent and is payable when the loanbecomes due.3. Depreciation on buildings owned by the campground is based on a 25-year life. The originalcost of the buildings was $600,000. The Accumulated Depreciation: Buildings account has a credit balance of $310,000 at December 31, prior to the adjusting entry process. The straight-line method of depreciation is used. 4. Management signed an agreement to let Boy Scout Troop 538 of Lewisburg, Pennsylvania,use the campground in June of next year. The agreement specifies that the Boy Scoutswill pay a daily rate of $15 per campsite, with a clause providing a minimum total chargeof $1,475.5. Salaries earned by campground employees that have not yet been paid amount to $1,250.6. As of December 31, Enchanted Forest has earned $2,400 of revenue from current camperswho will not be billed until they check out. (Debit Camper Revenue Receivable.)7. Several lakefront campsites are currently being leased on a long-term basis by a group ofsenior citizens. Six months’ rent of $5,400 was collected in advance and credited to UnearnedCamper Revenue on October 1 of the current year.8. A bus to carry campers to and from town and the airport had been rented the first week ofDecember at a daily rate of $40. At December 31, no rental payment has been made, althoughthe campground has had use of the bus for 25 days.9. Unrecorded Income Taxes Expense accrued in December amounts to $8,400. This amountwill not be paid until January 15.
Enchanted Forest, a large campground in South Carolina, adjusts its accounts monthly. Most
guests of the campground pay at the time they check out, and the amounts collected are credited
to Camper Revenue. The following information is available as a source for preparing the adjusting
entries at December 31:
1. Enchanted Forest invests some of its excess cash in certificates of deposit (CDs) with its local
bank. Accrued interest revenue on its CDs at December 31 is $400. None of the interest has
yet been received. (Debit Interest Receivable.)
2. A six-month bank loan in the amount of $12,000 had been obtained on September 1.
Interest is to be computed at an annual rate of 8.5 percent and is payable when the loan
becomes due.
3.
cost of the buildings was $600,000. The
credit balance of $310,000 at December 31, prior to the
line method of depreciation is used.
4. Management signed an agreement to let Boy Scout Troop 538 of Lewisburg, Pennsylvania,
use the campground in June of next year. The agreement specifies that the Boy Scouts
will pay a daily rate of $15 per campsite, with a clause providing a minimum total charge
of $1,475.
5. Salaries earned by campground employees that have not yet been paid amount to $1,250.
6. As of December 31, Enchanted Forest has earned $2,400 of revenue from current campers
who will not be billed until they check out. (Debit Camper Revenue Receivable.)
7. Several lakefront campsites are currently being leased on a long-term basis by a group of
senior citizens. Six months’ rent of $5,400 was collected in advance and credited to Unearned
Camper Revenue on October 1 of the current year.
8. A bus to carry campers to and from town and the airport had been rented the first week of
December at a daily rate of $40. At December 31, no rental payment has been made, although
the campground has had use of the bus for 25 days.
9. Unrecorded Income Taxes Expense accrued in December amounts to $8,400. This amount
will not be paid until January 15.
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