Question

a. On April 1, the company hired an attorney for a flat monthly fee of $3,000. Payment for April legal services was made by t

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Answer #1

Solution:

Transaction A:

No Date General Journal Debit Credit
1 Apr. 30 Legal Services Expenses $         3,000
Legal Services Payable $           3,000
[ Being legal expenses payable]
2 May. 12 Legal Services Payable $         3,000
Cash $           3,000
(Being legal services paid)

Transaction B:

No Date General Journal Debit Credit
3 Apr. 30 Interest Expenses $         1,076
Interest Payable $           1,076
[ Being interest expenses payable]
4 May. 20 Interest Payable $         1,076
Interest Expenses $         2,151
Cash $           3,227
[ Being interest expenses paid]

Notes:

1) It is given in the question that total interest paid is $ 3,227. So, we considered remaining $ 2,151($3,227-$1,076) as interest expense of may month.

2) Entry 4 will be explained in detail, if more information is available.

Transaction C:

No Date General Journal Debit Credit
5 Apr. 30 Salaries Expense(8000 / 5 days * 2 days) $         3,200
Salaries Payable $           3,200
[ Being salary expenses payable]
6 May. 3 Salaries Payable $         3,200
Cash $           3,200
(Being salary expense paid)
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