The Anniston Motel opened for business on May 1, 2010. Its trial balance before adjustment on May 31 is as follows.

Anniston Motel

Trial Balance

May 31, 2010

DebitCredit

Cash$ 2,500

Supplies1,900

Prepaid Insurance2,400

Land15,000

Equipment70,000

Furniture16,800

Accounts Payable$ 5,300

Unearned Rent3,600

Mortgage Payable40,000

Capital55,000

Rent Revenue9,200

Advertising Expense500

Salaries Expense3,000

Utilities Expense1,000

$113,100$113,100

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 equipment and $3,000 on furniture.

4. The mortgage interest rate is 12% per year. (The loan taken on May 1)

5. Unearned rent of $2,500 has been earned.

6. Salaries of $800 are accrued and unpaid at May 31.

Required:

(a) Journalize the adjusting entries on May 31.

(b) Prepare an adjusted trial balance on May 31.

(c) Prepare an income statement and an owner's equity statement and a balance sheet at May 31.