Cash 7 630 Accounts Receivable 13 080 Supplies 6 550 Prepaid Insurance 4 565 Land 108 100 Q17779858

Cash

$7,630

Accounts receivable

13,080

Supplies

6,550

Prepaid insurance

4,565

Land

108,100

Buildings

170,160

Accumulated depreciation—building

$ 20,800

Furniture

34,620

Accumulated depreciation—furniture

15,670

Accounts payable

8,360

Unearned revenue

22,225

Mortgage payable, due in 2019

126,750

Common shares

62,700

Retained earnings

51,180

Dividends

2,870

Rent revenue

190,661

Salaries expense

98,670

Utilities expense

27,780

Interest expense

9,330

Insurance expense

6,391

Advertising expense

1,170

Income tax expense

7,430

$498,346

$498,346

Additional information:

1.

The annual insurance policy was purchased on October 1, 2014,for $10,956.

2.

A count of supplies shows $3,070 of supplies on hand on May31.

3.

The building has an estimated useful life of 20 years.

4.

The furniture has an estimated useful life of five years.

5.

Customers must pay a $127 deposit if they want to book a roomin advance during the peak period. An analysis of these bookingsindicates that 175 deposits were received and credited to UnearnedRevenue. By May 31, 25 of the deposits were earned.

6.

On May 25, a local business contracted with Rainbow Lodge torent one of its housekeeping units for four months, starting June1, at a rate of $2,900 per month. An advance payment equal to onemonth’s rent was paid on May 25 and credited to Rent Revenue.

7.

On May 31, Rainbow Lodge has earned $2,800 of rent revenue fromcustomers who are currently staying at the inn. The customers willonly pay the amount owing when they check out in early June.

8.

Salaries of $3,130 are unpaid at May 31.

9.

The mortgage interest rate is 8%. Interest has been paid to May1; the next payment is due June 1.

10.

The May utility bill of $4,850 has not yet been recorded orpaid.

11.

Aditional income tax is estimated to be $2,000.

12.

During the month of May, $6,000 of common shares wereissued.

Prepare the T-Accounts and the Journal Entries
 
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