Debit
Credit
Cash
$7,120
Accounts receivable
13,370
Supplies
6,030
Prepaid insurance
4,575
Land
106,900
Building
170,160
Accumulated depreciation—building
$ 17,780
Furniture
34,740
Accumulated depreciation—furniture
14,370
Accounts payable
8,310
Unearned revenue
20,825
Mortgage payable, due in 2016
126,000
Common shares
64,900
Retained earnings
46,650
Dividends
3,860
Rent revenue
204,515
Salaries expense
98,910
Utilities expense
27,750
Interest expense
9,300
Insurance expense
6,405
Advertising expense
2,990
Income tax expense
11,240
$503,350
$503,350
Additional information:
1.
The annual insurance policy was purchased on October 1, 2011,for $10,980.
2.
A count of supplies shows $2,280 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 $119 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 $3,400 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 $3,480 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 $2,520 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 $3,050 has not yet been recorded orpaid.
11.
Additional income tax is estimated to be $1,610.
12.
During the month of May, $4,300 of common shares wereissued.
Prepare the closing journal entries and post them to T -accounts
year end, May 31, 2015. The company adjusts its accountsmonthly.
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