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

Question

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 other data: 1. Insurance expires at the rate of $450 per month. 2. A count of supplies shows $1,077 of unused supplies on May 31. 3. (a) Annual depreciation is $4,200 on the building, (b) Annual depreciation is $4,080 on equipment. 4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,581 has been earned. 6. Salaries of $747 are accrued and unpaid at May 31.

Explanation / Answer

Journal

1 ) Insurance expense Dr $ 450

Prepaid insurance Cr $ 450

2) Supplies expenses Dr $ 1,523

Supplies Cr $ 1,523

3) a) depreciation Dr $ 350 ( 4,200 / 12)

Accumulated depreciation- Building Cr $ 350

b) Depreciation Dr $340 ( 4,080 / 12)

Accumulated Depreciation Cr $ 340

4. Interest on Mortgage Dr 186 ( 37,200 X 6% X 1/12)

Interest payable Cr 186

5. Unearned rent dr $ 2,581

rental income Cr $ 2,581

6. salaries expenses Dr $ 747

salaries Payable Cr $ 747

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