The unadjusted trial balance of Midway Inn Company at December 31, 2018, and the data needed for the adjustments follow.

Midway INN Company
Unadjusted Trial Balance
December 31, 2018
		Balance
Account Title	Debit	Credit
Cash	\( 14,500
Accounts Receivables	15,100
Prepaid Insurance	1,400
Office Supplies	700
Building	518,000
Accumulated Depreciation – Building		\) 310,000
Accounts Payable		4,210
Salaries Payable
Unearned Revenue		1,600
Common Stock		222,160
Dividends	1,890
Service Revenue		16,900
Salaries Expense	2,600
Insurance Expense
Depreciation Expense – Building
Advertising Expense	680
Supplies Expense
Total	\( 554,870	\) 554,870

Adjustment data at December 31 follow:

a. As of December 31, Midway Inn had \(800 of Prepaid Insurance remaining.

b. At the end of the month, Midway Inn had \)500 of office supplies remaining.

c. Depreciation on the building is \(2,100.

d. Midway Inn pays its employees on Friday for the weekly salaries. Its employees earn \)1,300 for a five-day workweek. December 31 falls on Wednesday this year.

e. On November 20, Midway Inn contracted to perform services for a client receiving \(1,600 in advance. Midway Inn recorded this receipt of cash as Unearned Revenue. As of December 31, Midway Inn has \)1,400 still unearned.

Requirements

1. Journalize the adjusting entries on December 31.

2. Using the unadjusted trial balance, open the accounts (use a four-column ledger) with the unadjusted balances. Post the adjusting entries to the ledger accounts.

3. Prepare the adjusted trial balance.

4. Assuming the adjusted trial balance has total debits equal to total credits, does this mean that the adjusting entries have been recorded correctly? Explain.

Particular

Debit

Credit

2018

Dec 31

Insurance Expense

$ 600

Prepaid Insurance

$ 600

Being insurance expense incurred

Dec 31

Supplies Expense

$ 200

Office Supplies

$ 200

Being supplies expense incurred

Dec 31

Depreciation Expense – Building

$ 2,100

Accumulated Depreciation - Building

$ 2,100

Being depreciation charged on building

Dec 31

Salaries Expense

$ 780

Salaries Payable

$ 780

Being salaries payable for the last workweek for December

Dec 31

Unearned Revenue

$ 200

Service revenue

$ 200

Being service revenue earned

Total

$ 4,400

Insurance Expense

Date

Amount

Date

Amount

2018

Dec 31

$ 600

Bal.

$ 600

Prepaid Insurance

Date

Amount

Date

Amount

2018

Bal.

$ 1,400

Dec 31

$ 600

Bal.

$ 800

Supplies Expense

Date

Amount

Date

Amount

2018

Dec 31

$ 200

Bal.

$ 200

Office Supplies

Date

Amount

Date

Amount

2018

Bal.

$ 700

Dec 31

$ 200

Bal.

$ 500

Depreciation Expense – Building

Date

Amount

Date

Amount

2018

Dec 31

$ 2,100

Bal.

$ 2,100

Accumulated Depreciation – Building

Date

Amount

Date

Amount

2018

Bal.

$ 310,000

Dec 31

2,100

Bal.

$ 312,100

Date

Amount

Date

Amount

2018

Bal.

$ 2,600

Dec 31

780

Bal.

$ 3,380

Salaries Payable

Date

Amount

Date

Amount

2018

Dec 31

$ 780

Bal.

$ 780

Unearned Revenue

Date

Amount

Date

Amount

2018

Bal.

$ 1,600

Dec 31

$ 200

Bal.

$ 1,400

Service Revenue

Date

Amount

Date

Amount

2018

Bal.

$ 16,900

Dec 31

200

Bal.

$ 17,100

Midway INN Company

Unadjusted Trial Balance

December 31, 2018

Balance

Account Title

Debit

Credit

Cash

$ 14,500

Accounts Receivables

15,100

Prepaid Insurance

800

Office Supplies

500

Building

518,000

Accumulated Depreciation – Building

$ 312,100

Accounts Payable

4,210

Salaries Payable

780

Unearned Revenue

1,400

Common Stock

222,160

Dividends

1,890

Service Revenue

17,100

Salaries Expense

3,380

Insurance Expense

600

Depreciation Expense – Building

2,100

Advertising Expense

680

Supplies Expense

200

Total

$ 557,750

$ 557,750