Question

a. At year-end, salaries expense of $17,000 has been incurred by the company but is not yet paid to employees. Salaries payable Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 b. At its December 31 year-end, the company owes $325 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year. Interest payable Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. c. At its December 31 year-end, the company holds a mortgage payable that has incurred $950 in annual interest that is neither recorded nor paid. The company intends to pay the interest on January 7 of the next year. Interest payable Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.

Answer 1

Answers

[a]			Salaries Payable
Step 1	$0			$19,500
Step 2	$17,000	Credit		$21,800
				$41,300
Step 3	Accounts title	Debit	Credit
	Salaries expense	$17,000
	Salaries Payable		$17,000
[b]			Interest Payable
Step 1	$0			$0
Step 2	$325	Credit		$325
				$325
Step 3	Accounts title	Debit	Credit
	Interest Expense	$325
	Interest Payable		$325
[c]			Interest Payable
Step 1	$0			$0
Step 2	$950	Credit		$950
				$950
Step 3	Accounts title	Debit	Credit
	Interest Expense	$950
	Interest Payable		$950