The Thayer Motel, Inc., opened for business on May 1, 2008. 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 for Thayer Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation— Lodge, No. 150 Accumulated Depreciation—Furniture, No. 212 Salary 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 $900 of unused supplies on May 31.
3. Annual depreciation is $2,400 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.
(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 enteries. (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 May31.

Transcribed Image Text:

THAYER MOTEL. INC. Trial Balance May 31. 2008 Credit S 2,500 Insurance S 5,300 201 Acounts Payable 208 Unearned Rent 275 Mortgage Payable 311 Common Stock 60,000 429 Rent Revenue 610 Advertising Expense $114,100 $114,100