Question
Macs Motel opened for business on May 1, 2019. It's trial balance before adjustment on May 31 is as follows. MACS MOTEL Trial Balance May
Macs Motel opened for business on May 1, 2019. It's trial balance before adjustment on May 31 is as follows.
MACS 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 Owners 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 Macs Motel also contains the following accounts and account numbers: No. 142 Accumulated DepreciationBuildings, No. 150 Accumulated DepreciationEquipment, 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.
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