Question

Problem 3-02A a-d (Part Level Submission) Sunland's Hotel opened for business on May 1, 2020. Its trial balance before adjustment on May 31 is as follows. SUNLAND'S HOTEL Trial Balance May 31, 2020 Account Number Debit Credit 101 Cash $ 3,600 126 Supplies 2,000 130 Prepaid Insurance 2,400 140 Land 12,000 141 Buildings 60,400 149 Equipment 15,000 201 Accounts Payable $ 4,800 208 Unearned Rent Revenue 3,000 275 Mortgage Payable 40,000 301 Owner’s Capital 41,200 429 Rent Revenue 11,050 610 Advertising Expense 550 726 Salaries and Wages Expense 3,200 732 Utilities Expense 900      $100,050 $100,050 In addition to those accounts listed on the trial balance, the chart of accounts for Sunland’s Hotel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. Prepaid insurance is a 1-year policy starting May 1, 2020. 2. A count of supplies shows $800 of unused supplies on May 31. 3. Annual depreciation is $3,624 on the buildings and $1,500 on equipment. 4. The mortgage at an annual interest rate is 6%. (The mortgage was taken out on May 1.) 5. Two-thirds of the unearned rent revenue has been earned. 6. Salaries of $700 are accrued and unpaid at May 31.

(a) Journalize the adjusting entries on May 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit 1. May 31 2. May 31 3. May 31 4. May 31 5. May 31 6. May 31

Answer 1

No	Date	Account Titles and Explanation	Debit	Credit
1.	May 31	Insurance expense	$200
		Prepaid insurance		$200
		( To record insurance expense)
2.	May 31	Supplies expense	$1,200
		Supplies		$1,200
		( To record supplies expense)
3.	May 31	Depreciation expense	$302
		Accumulated depreciation- Building		$302
		( To record depreciation expense on building)
3.	May 31	Depreciation expense	$125
		Accumulated depreciation- Equipment		$125
		( To record depreciation expense on equipment)
4.	May 31	Interest expense	$200
		Interest payable		$200
		( To record interest expense)
5.	May 31	Unearned Rent revenue	$2,000
		Rent revenue		$2,000
		( To record unearned rent revenue earned)
6.	May 31	Salaries and wages expense	$700
		Salaries and wages payable		$700
		( To record salaries and wages expense)

1.

Insurance expense for 1 year = $2,400

Insurance expense for 1 month = 2,400 x 1/12

= $200

2.

Supplies expense = Supplies purchased- Ending supplies

= 2,000-800

= $1,200

3.

Annual depreciation of building = $3,624

Monthly depreciation on building = 3,624 x 1/12

= $302

Annual depreciation on equipment = $1,500

Monthly depreciation on equipment = 1,500 x 1/12

= $125

4.

Interest expense = Mortgage payable x Interest rate x 1/12

= 40,000 x 6% x 1/12

= $200

5.

Unearned rent revenue earned = Unearned rent revenue x 2/3

= 3,000 x 2/3

= $2,000

Kindly comment if you need further assistance.

Thanks‼!