Question

For each of the following transactions(a) through (c) for Cantana’s Marketing Company. Prepare the adjusted entry. The process includes (1) determine of revenue was earned or an expense was incurred. (2) determine whether cash was received or paid in the past will be received or paid in the future. And (3) computing the amount of the adjustment (if no entry is required for a transaction/event, select “No journal entry required” in the first account failed) a. Estimated electricity usage at $450 for December, to be in January of next year b. On September 1 of the current year, loaned $6,000 to an officer who will repay the loan principal and interest in one year at an annual interest rate of 14 percent. c. Owed wages to 10 employees who worked four days at $200 each per day at the of the current year. The company will pay employees at the end of the first week of next year.

Answer 1

Transaction -(a) Electricity usage at $450 for December The expense was incurred in December The payment of cash was paid in future, in the month January Amount of adjustment required $ 450 Adjusting journal entry: Transaction Account Title Debit $ (a) Utility Expense 450 Utility Expense Payable Credit $ 450

Transaction -(b) Loan $6,000 to an officer Interest revenue was earned Cash to be received in future Interest amount=6,000 x 14% 24/12= $280 Credit $ Transaction Account Title Interest Revenue Receivable Interest Revenue Debit $ 280 (b) 280

Transaction -( Owed wages to 10 employees The expense was incurred Cash to be paid in next year wages Expense= 10x4x $200= $8,000 Transaction Account Title (C) Wages Expense Wages Expense Payable Credit $ Debit $ 8,000 8,000