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Gunflint Adventures operates an airplane service that takes fishing parties to a remote lake resort in...

Gunflint Adventures operates an airplane service that takes fishing parties to a remote lake resort in northern Manitoba, Canada. Individuals must purchase their tickets at least one month in advance during the busy summer season. The company adjusts its accounts only once each month. Selected balances appearing in the company's June 30 adjusted trial balance appear as follows. Prepaid airport rent DEBIT 9000. Unexpired insurance DEBIT 4200. Airplane DEBIT 288000. Accumulated depreciation: airplane CREDIT 80000. Unearned passenger revenue CREDIT 75000. 1. The airplane is being depreciated over a 15 year life with no residual value. 2. Unearned passenger revenue represents advance ticket sales for bookings in July and August at $300per 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 feb 1. 5. passenger revenue earned in june totaled $40,000. INSTRUCTIONS A. Determine the following. 1. the age of the airplane in months. 2. the monthly airport rent expense. 3. the amount paid for the 12 month insurance policy on feb 1. B. Prepare the adjusting entries made on june 30 involving the following accounts. 1. depreciation expense for airplane. 2. airport rent expense 3. insurance expense. 4. passenger revenue earned.

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Answer #1
Age of airplane in months 15*12 $180
Monthly Airport Rent expenses 9000/6 $1,500
Amt paid for 12 months insurance $4,200
for a month it is 4200/12=350 for 5 months is 1750
Trans Accounts Title Dr Cr
1 Depreciation expenses $1,600
Accumulated depreciation-Airplane $1,600
(288000/15)*1/12
2 Airport Rent expenses $3,000
Prepaid Airport Rent $3,000
(9000/6*2)
3 Insurance expenses $1,750
Unexpired Insurance $1,750
(4200/12*5)
4 Accounts receivable $40,000
Passenger Revenue Earned $40,000
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