Question

The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on May 31.

Answer 1

Answer:

1. Insurance expires at the rate of $450 per month.

Dr Insurance expense 450

    Cr Prepaid insurance 450

2. A count of supplies shows $1,140 of unused supplies on May 31.

Dr Supplies expense 1,460

    Cr Supplies 1,460

3. (a) Annual depreciation is $2,880 on the building.

Dr Depreciation expense 240

    Cr Accumulated depreciation, building 240

(b) Annual depreciation is $2,280 on equipment.

Dr Depreciation expense 240

    Cr Accumulated depreciation, equipment 190

4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)

Dr Interest expense 168

    Cr Interest payable 168

5. Unearned rent of $2,510 has been earned.

Dr unearned revenue 2,510

    Cr Rent revenue 2,510

6. Salaries of $880 are accrued and unpaid at May 31.

Dr Wages expense 880

    Cr Wages payable 880