Badger Motel, Ltd. opened for business on May 1, 2017. Its trial balance before adjustment on May 31 is as follows.

In addition to those accounts listed on the trial balance, the chart of accounts for Badger Motel, Ltd. also contains the following accounts and account numbers: No. 142 Accumulated Depreciation-Buildings, No. 158 Accumulated Depreciation-Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.
Other data:
1. Prepaid insurance is a 1-year policy starting May 1, 2014.
2. A count of supplies shows £350 of unused supplies on May 31.
3. Annual depreciation is £2,640 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 should be recognized as rent revenue prior to May 31.
6. Salaries of £750 are accrued and unpaid at May 31.
Instructions
(a) Journalize the adjusting entries on May 31.
(b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.)
(c) Prepare an adjusted trial balance on May 31.
(d) Prepare an income statement and a retained earnings statement for the month of May and a statement of financial position at May 31.

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BADGER MOTEL, LTD Trial Balance May 31, 2017 Account Number 101 126 130 140 141 157 201 208 275 311 429 610 726 732 Debit £ 2,500 1,520 2,400 14,000 58,000 15,000 Credit 3 Supplies Prepaid Insurance Land Buildings Accounts Payable Unearned Rent Revenue Mortgage Payable Share Capital-Ordinary Rent Revenue Advertising Expense Salaries and Wages Expense Utilities Expense £ 4,800 3,300 38,000 40,000 12,300 780 3,300 £98,400 £98,400