[naynay8533]

The Olathe Hotel opened for business on May 1, 2010. Here is its trial balance before adjustment on May 31.


OLATHE HOTEL
Trial Balance
May 31, 2010

Debit Credit
Cash $2,500
Prepaid Insurance 1,800
Supplies 2,600
Land 15,000
Lodge 70,000
Furniture 16,800
Accounts Payable $4,700
Unearned Rent Revenue 3,300
Mortgage Payable 36,000
Common Stock 60,000
Rent Revenue 9,000
Salaries Expense 3,000
Utilities Expense 800
Advertising Expense
500




$113,000

$113,000


Other data:
1. Insurance expires at the rate of $300 per month.
2. A count of supplies shows $1,050 of unused supplies on May 31.
3. Annual depreciation is $3,600 on the lodge and $3,000 on furniture.
4. The mortgage interest rate is 7%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,500 has been earned.
6. Salaries of $750 are accrued and unpaid at May 31.

[pready]

Numbers 1 through 6 are adjusting entries. You need to compute the amounts then do the entry.
1. The amount is given to you. It is $300
2. The amount you will use is the difference between your account balance and your physical balance.
3. Take the amounts times 1/12 to get one month of depreciation for each item.
4. Take the amount of mortgage times 7% times 1/12 to get interest for one month.
5. The amount is given to you. It is $2,500
6. The amount is given to you. It is $750

Now you just need to figure out what accounts to debit and credit so you can do your adjusting entry.