The following transactions occurred for a new motel prior to and during the first month of business operations. Study the motel transactions shown below and record the necessary journal entries, skipping a line between each entry. Journal entries and modified T ledger accounts can be prepared easily on lined paper following the examples shown in the text.

a. Owner invested $360,000 cash deposited in the business bank account.

b. Owner paid $128,000 cash for land.

c. Owner borrowed $330,000 on a mortgage payable at 6% interest.

d. Owner paid cash for building $395,400.

e. Equipment was purchased for $62,000, paying $22,000 cash and the balance on a note payable.

f. Furnishings were purchased for $98,000 cash.

g. Linen inventory was purchased for $6,474 on account.

h. Supplies were purchased for $2,800 on account.

i. Vending inventory was purchased for $380 cash.

j. Room revenue during month was $44,000 cash.

k. Vending revenue from vending machines was $800 cash.

l. Wages of $2,900 cash were paid.

m. Owner paid $2,200 on accounts payable.

n. Owner paid $4,800 on annual liability and casualty insurance policy.

o. Owner paid $1,000 on the mortgage payable and $1,650 for interest.

After journalizing and posting the operating transactions, journalize the following adjusting entries: (Use separate entries for clarity.)

a. Estimated closing value of the linen inventory is $5,700.

b. Wages earned by employees but unpaid are $400.

c. One-twelfth of the prepaid insurance has been consumed.

d. Interest owing, but not yet paid, on the equipment notes payable account is 1 percent of the balance owing at month-end.

e. Equipment depreciation is based on a life of 12 years with a $5,000 residual value, straight-line depreciation.

f. Furnishings depreciation is based on an eight-year life with a $4,000 residual (salvage) value, straight-line depreciation.
g. Building has a 20-year life with a residual (salvage) value of $45,000, straight-line depreciation.
h. Supplies used during the first month are $600.