Question

Dorothy Taylor is the new owner of Dorothy's Computer Services. At the end of July 2022, her first month of ownership, Dorothy is trying to prepare monthly financial statements. She has the following information for the month. 1. At July 31. Dorothy owed employees $3,830 in salaries that the company will pay in August. 2. On July 1, Dorothy borrowed $22,500 from a local bank on a 12-year note. The annual interest rate is 8%. 3. Service revenue unrecorded in July totaled $1,600. Prepare the adjusting entries needed at July 31, 2022. (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit - 1. Activate Windows Go to Settings to activate Window

Answer 1

Solution

Ignore explanation if not required.

No.	Accounts title and explanation	Debit	Credit
1	Salaries expense	$      3,830.00
	Salaries payable		$            3,830.00
	(To record accrues salaries)
2	Interest expense	$         150.00
	Interest payable		$                150.00
	(To record interest on note accrues for 1 month)
3	Accounts receivable	$      1,600.00
	Service revenue		$            1,600.00
	(To record service revenue earned)

Interest for 1 month is recorded as expense [(22500 x 8%) * (1/12)]