The Mound View Motel opened for business on May 1, 2010. Its trial balance before adjustment on May 31 is as follows.

MOUND VIEW MOTEL Trial Balance May 31, 2010
Account	Â	Â		Â
Number	Â	Debit		Credit
101	Cash	$ 3,500		Â
126	Supplies	2,200		Â
130	Prepaid Insurance	2,280		Â
140	Land	12,000		Â
141	Lodge	60,000		Â
149	Furniture	15,000		Â
201	Accounts Payable		Â	$ 4,800
209	Unearned Rent Revenue		Â	3,300
275	Mortgage Payable		Â	35,000
301	Kevin Henry, Capital		Â	46,380
429	Rent Revenue		Â	10,300
610	Advertising Expense	600		Â
726	Salaries Expense	3,300		Â
732	Utilities Expense	900		Â
Â	Â	$99,780		$99,780
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In addition to those accounts listed on the trial balance, the chart of accounts for Mound View Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Lodge, No. 150 Accumulated Depreciation—Furniture, No. 212 Salaries Payable,No. 230 Interest Payable,No. 619 Depreciation Expense—Lodge,No. 621 Depreciation Expense—Furniture, 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, 2010.

2. A count of supplies shows $750 of unused supplies on May 31.

3. Annual depreciation is $3,000 on the lodge and $2,700 on furniture.

4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.)

5. Two-thirds of the unearned rent revenue has been earned.

6. Salaries of $750 are accrued and unpaid at May 31.

Instructions

(a) Journalize the adjusting entries on May 31.

(b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.)

(c) Prepare an adjusted trial balance on May 31.

(d) Prepare an income statement and an owner’s equity statement for the month of May and a balance sheet at May 31.