Question

Prepare the adjusting entries required at December 31, 2014, in each of the following cases. These adjustments are for the year ended December 31, 2014.

a. ABC Company was assessed property taxes of $350 for 2014. The taxes were due April 15, 2015.

b. ABC Company’s payroll was $6,000 per five day work week. Payroll is paid every Friday. The company closes its books on December 31st which falls on a Thursday.

c. ABC Company has $3,000 of savings bonds. Interest receivable on these bonds was $180 at December 31st.

d. ABC Company owns a building costing $30,000. One thousand dollars of the cost is to be allocated to Expense in 2014. e. ABC Company signed a Note on September 16 for $20,000. The note carried a 6% interest and was for 2 years.

f. Office Supplies had a balance of $584 on January 1st. Purchases debited to Office Supplies during the year amount to $900. A year-end inventory reveals supplies of $385 on hand.

Prepare the adjusting entries required at December 31, 2014, in each of the following cases. These adjustments are for the year ended December 31, 2014 a. ABC Company was assessed property taxes of $350 for 2014. The taxes were due April 15, 2015 b. ABC Company's payroll was $8.000 per fe day work week. Payroll is paid every Friday. The company closes its books on December 31" which falls on a Thursday ABC Company has $3,000 of savings bonds. Interest receivable on these bonds was $180 at December 31st. d. ABC Company owns a building costing $30,000. One thousand dollars of the cost is to be allocated to Expense in 2014 e. ABC Company signed a Note on September 16 for $20,000. The note carried a 6% interest and was for 2 years f. Office Supplies had a balance of $584 on January 1". Purchases debited to Office Supplies during the year amount to $900. A year-end inventory reveals supplies of $385 on hand. Journal Entries 2014 Date Accounts Debit Credit 12/31-8 Property Tax Expense Property Tax Payable 350 Page 4 of 6

Answer 1

ABC Company
Journal entries
Date	Account	Debit	Credit	Calculation
31-Dec	Property Tax Expense	$           350
a	Property Tax Payable		$           350
31-Dec	Salaries expense	$        4,800		=6,000/5 days *4 days
b	Salaries Payable		$        4,800	4 days from Monday to Thursday
31-Dec	Interest receivable	$           180
c	Interest revenue		$           180
31-Dec	Depreciation expense	$        1,000
d	Accumulated Depreciation - Building		$        1,000
31-Dec	Interest expense	$           350		=20,000*6%*3.5/12
e	Interest Payable		$           350	3.5 months from Sep 16 to Dec 31
31-Dec	Supplies expense	$        1,099		=584+900-385
f	Supplies		$        1,099	Open bal + Purchases - Closing bal