The Thayer Motel Inc. opened for business on May 1, 2006. 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 tor Thayer Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—
Lodge, No. 150 Accumulated Depreciation—Furniture. No. 212 Salaries Payable. No. 230 Interest Payable. No. 320 Retained Earnings, No. MM Depreciation Expense—Lodge. No. 621 Depreciation Expense—Furniture. No. 631 Supplies Expense, No. "IN Interest Expense, and No. 722 Insurance Expense.
Other data:
1. Insurance expires ;it the rate ol $200 per month.
2. \ count of supplies shows $900 of unused supplies on Ma\ 31.
3. Annual depreciation is $2,400 on die lodge and $3,000 on furniture.
4. I he mortgage interest rate is 12%, (The mortgage was taken out on May 1.)
5. Unearned rent of $2.50(1 has been earned.
6. Salaries of $800 are accrued and unpaid at Ma\ 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 Jl 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 balance sheet at May 31.

Transcribed Image Text:

THAYER MOTEL INC. Trial Balance May 31, 2006 Account Number 101 Cash Debit. $ 2,500 Credit 126 Supplies 1,900 130 Prepaid Insurance 2.400 140 Land 15,000 141 Lodge 70,000 149 Furniture 16,800 201 Accounts Payable $ 5,300 208 Unearned Rent 4,600 275 Mortgage Payable 35,000 311 Common Stock 60,000 332 Dividends 1,000 429 Rent Revenue 9.200 610 Advertising Expense 500 726 Salaries Expense 3.000 732 Utilities Expense 1.000 $114.100 $114.100