Problem 4-3A The Solo Hotel opened for business on May 1, 2014. Here is its tria

Question

Problem 4-3A

The Solo Hotel opened for business on May 1, 2014. Here is its trial balance before adjustment on May 31.

SOLO HOTEL
Trial Balance
May 31, 2014 Debit Credit Cash $ 2,785 Supplies 2,600 Prepaid Insurance 1,800 Land 15,285 Buildings 76,000 Equipment 16,800 Accounts Payable $ 4,985 Unearned Rent Revenue 3,300 Mortgage Payable 42,000 Common Stock 60,285 Rent Revenue 9,000 Salaries and Wages Expense 3,000 Utilities Expense 800 Advertising Expense 500 $119,570 $119,570
Other data:

1. Insurance expires at the rate of $300 per month. 2. A count of supplies shows $1,144 of unused supplies on May 31. 3. (a) Annual depreciation is $4,320 on the building. (b) Annual depreciation is $4,200 on equipment. 4. The mortgage interest rate is 5%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,691 has been earned. 6. Salaries of $645 are accrued and unpaid at May 31. The Solo Hotel opened for business on May 1, 2014. Here is its trial balance before adjustment on May 31. Other data: Journalize the adjusting entries on May 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Explanation / Answer

Debit Credit 1 Profit and loss a/c $     300.00 To Insurance expense $     300.00 2 Utilities expense $ 1,456.00 To supplies $ 1,456.00 3 Profit and loss a/c $     360.00 To Depreciation $     360.00 Profit and loss a/c $     350.00 To Depreciation $     350.00 4 Profit and loss a/c $     175.00 To mortagage interst $     175.00 5 Rent revenue $ 2,691.00 To unearned revenue $ 2,691.00 6 Salaries $     645.00 To salaries outstanding $     645.00

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