Problem 43A Part Level Submission The Moto Hotel opened for

Problem 4-3A (Part Level Submission) The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on May 31 MOTO HOTEL Trial Balance May 31, 2017 Debit Credit Cash Supplies Prepaid Insurance Land Buildings Equipment Accounts Payable Unearned Rent Revenue Mortgage Payable Common Stock Rent Revenue Salaries and Wages Expense Utilities Expense Advertising Expense $2,523 2,600 1,800 15,023 72,400 16,800 $ 4,723 3,300 38,400 60,023 9,000 3,000 800 500 $115,446 $115,446 Other data:

Solution

No. Account Titles and Explanations Debit Credit 1) Insurance Expense $               300 Prepaid Insurance $            300 (To record insurance expired during the month) 2) Supplies Expense $           1,410 Supplies $         1,410 (To record supplies used during month) 3-a. Depreciation Expense $               270 Accumulated depreciation-Building $            270 (To record depreciation expense for the month) 3-b. Depreciation Expense $               220 Accumulated depreciation-Equipment $            220 (To record depreciation expense for the month) 4) Interest Expense $               160 Interest Payable $            160 (To record interest accrued on mortgage) 5) Unearned Rent $           2,600 Rent Revenue $         2,600 (To record rent revenue earned) 6) Salaries expenses $               770 Salaries Payable $            770 (To Record Salaries accrued in may) Working: 2) Supplies before adjustment $           2,600 Supplies after adjustment $           1,190 Supplies used $           1,410 3-a. Monthly depreciation = $         3,240 / 12 = $        270 3-b. Monthly depreciation = $         2,640 / 12 = $        220 4) Interest expense for the month = $      38,400 x 5% x 1/12 = $        160