Question

Mac’s Motel opened for business on May 1, 2019. It's trial balance before adjustment on May 31 is as follows.

MAC’S MOTEL

Trial Balance

May 31, 2019

Account Number Debit Credit

101 Cash $ 3,500

126 Supplies 2,080

130 Prepaid Insurance 2,400

140 Land 12,000

141 Buildings 60,000

149 Equipment 15,000

201 Accounts Payable $ 4,800

208 Unearned Rent Revenue 3,300

275 Mortgage Payable 40,000

301 Owner’s Capital 41,380

429 Rent Revenue 10,300

610 Advertising Expense 600

726 Salaries and Wages Expense 3,300

732 Utilities Expense 900

Total $99,780 $99,780

In addition to those accounts listed on the trial balance, the chart of accounts for Mac’s Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.

Other data:

1. Prepaid insurance is a 1-year policy starting on May 1, 2017.

2. A count of supplies shows $750 of unused supplies on May 31.

3. Annual depreciation is $3,000 on the buildings and $1,500 on equipment.

4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.)

5. Two-thirds of the unearned rent revenue has been earned.

6. Salaries of $750 are accrued and unpaid on May 31.

Make Adjusting Journal Entries for the above transactions.

Answer 1