Prepare the annual year-end adjusting journal entries at December 31. 1 answer below »

 
   

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Alternate problem A The trial balance of Caribbean Vacation Tours, Inc., at December 31 of the current year includes, among other items, the following account balances:  

Debits

Credits

Prepaid Insurance

$24,000  

Prepaid Rent

24,000  

Buildings

188,000  

Accumulated Depreciation—Buildings

 

$31,600

Salaries Expense

200,000  

The balance in the Prepaid Insurance account is the advance premium for one year from September 1 of the current year.

The buildings are expected to last 25 years, with an expected residual value of USD 30,000.

Salaries incurred but not paid as of December 31 amount to USD 8,400.

The balance in Prepaid Rent is for a one-year period that started March 1 of the current year.

Prepare the annual year-end adjusting journal entries at December 31.