Gunflint adventures operate an airplane service that take fishing parties to a remote lake season lake resort in northemManitoba, Canada. Individuals must purchase their tickest at least one month in advance during the busy summer season. The company adjusts its accounts only one each month. Selected balances appearing in the company's June 30 adjusted trial balance appear as follows.
DEbit Credit
Prepaid airport rent.................................................... $9,000
Unexpired insurance................................................... 4,200
Airplane........................................................................288,000
Accumulated depreciations airplane.......................... $80,000
Uneamed passenger revenue..................................... 75,000
Other information
1. The airplane is being depreciated over a 15 year life with no residual value.
2. Unearned passenger revenue represents advance ticket sales for booking in July and August at $300 per ticket.
3. Six months' airport rent had been prepaid on May 1.
4. The unexpired insurance is what remains of a 12 month policy purchased on February 1.
5. Passenger revenue earned June totaled $40,000.
I have to determine the following.
-The age of airplane in months.
-The monthly airport rent.
-The amount paid for the 12 month insurance policy on February 1.
I have to prepare the adjusting entries made on JUne 30 involving the following accounts.
-Depreciation Expense: Airplane
-Airplane Rent Expense
- Insurance Expense
-Passenger revenue Earned