Elston Motel, Inc: Adjusting entries, trial balance, balance sheet, income statement The Elston Motel, Inc. opened for business on May 1, 2008. Its trial balance before adjustment on May 31 is as follows. ELSTON MOTEL, INC. Trial Balance May 31, 2008 Account Number Debit Credit 101 Cash $ 2,500 126 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 3,600 275 Mortgage Payable 40,000 311 Common Stock 55,000 429 Rent Revenue 9,200 610 Advertising Expense 500 726 Salaries Expense 3,000 732 Utilities Expense 1,000 TOTAL $113,100 $113,100 In addition to those accounts listed on the trial balance, the chart of accounts for Elston 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. 619 Depreciation Expense- Lodge, No. 621 Depreciation Expense-Furniture, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. Insurance expires at the rate of $200 per month. 2. A count of supplies shows $500 of unused supplies on May 31. 3. Annual depreciation is $3,600 on the lodge and $3,000 on furniture. 4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,500 has been earned. 6. Salaries of $800 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 balance sheet at May 31