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P3-2A Macs Motel opened for business on May 1, 2017. Its trial balance before adjust ment on May 31 is as follows MACS MOTE
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Mac's Motel
First we will calculate adjustment amount. Then we will make adjustment entries.
Event Workings for adjustment entries Amount $
1 Prepaid Insurance            2,400.00
Paid for (months)                 12.00
Insurance expense               200.00
2 Supplies Balance            2,080.00
Less: Unused Supplies               750.00
Supplies expense           1,330.00
3 Deprecation Expense- Building           3,000.00
Deprecation Expense- Equipment           1,500.00
4 Mortgage Payable         40,000.00
Interest rate 12%
Annual Interest            4,800.00
Interest Expense               400.00
5 Unearned Rent revenue            3,300.00
Rent earned (2/3)           2,200.00
6 Salary and Wages Payable               750.00
Adjusting Entries
Event Account Debit $ Credit $
1 Insurance expense           200.00
Prepaid Insurance           200.00
(being Prepaid Insurance expired)
2 Supplies Expense        1,330.00
Supplies        1,330.00
(being supplies used)
3 Depreciation expense        4,500.00
Accumulated Depreciation- Buildings        3,000.00
Accumulated Depreciation- Equipment        1,500.00
(being Depreciation charged to Buildings and Equipment)
4 Interest Expense           400.00
Interest payable           400.00
(being liability for Interest Expense created)
5 Unearned Rent Revenue        2,200.00
Rent Revenue        2,200.00
(being Unearned Rent Revenue earned )
6 Salaries and Wages expense           750.00
Salaries and Wages payable           750.00
(being liability for Salaries expense created)
Ledger
Cash
Date Explanation Ref. Debit Credit Balance
May 31 Balance       3,500.00
Supplies
Date Explanation Ref. Debit Credit Balance
May 31 Balance       2,080.00
May 31 Adjusting 1,330.00          750.00
Prepaid Insurance
Date Explanation Ref. Debit Credit Balance
May 31 Balance       2,400.00
May 31 Adjusting      200.00       2,200.00
Land
Date Explanation Ref. Debit Credit Balance
May 31 Balance     12,000.00
Buildings
Date Explanation Ref. Debit Credit Balance
May 31 Balance     60,000.00
Accumulated Depreciation- Buildings
Date Explanation Ref. Debit Credit Balance
May 31 Adjusting 3,000.00       3,000.00
Equipment
Date Explanation Ref. Debit Credit Balance
May 31 Balance     15,000.00
Accumulated Depreciation- Equipment
Date Explanation Ref. Debit Credit Balance
May 31 Adjusting 1,500.00       1,500.00
Accounts Payable
Date Explanation Ref. Debit Credit Balance
May 31 Balance       4,800.00
Salaries and Wages payable
Date Explanation Ref. Debit Credit Balance
May 31 Adjusting      750.00          750.00Unearned Rent Revenue Ref. Debit Credit Date Explanation May 31 Balance May 31 Adjusting Balance 3,300.00 1,100.00 2,200.00 MUtilities expense Debit Ref. Credit 1 Date Explanation 2 May 31 Balance Balance 900.00 Insurance expense Ref. Debit 200.00 5Credit $ 3,000.00 Adjusted Trial Balance Account Titles Debit $ Cash 3,500.00 Supplies 750.00 Prepaid Insurance 2,200.00 Land| Amount $ 12,500.00 Income Statement Rent Revenue Less: Advertising Expense Salaries and Wages expense Utilities expense InsAmount $ Balance Sheet Assets Current Assets Cash Supplies Prepaid Insurance Total Current Assets Fixed Assets 3,500.00 750.0
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