Question

Wildhorse Co. has the following information available for accruals for the year ended December 31, 2017. The company adjusts its accounts annually.

.1. The December utility bill for $460 was unrecorded on December 31. Wildhorse paid the bill on January 11. 

2. Wildhorse is open 7 days a week and employees are paid a total of $3,780 every Monday for a 7-day Monday-Sunday) workweek. December 31 is a Thursday, so employees will have worked 4 days (Monday, December 28-Thursday, December 31) that they have not been paid for by year-end. Employees will be paid next on January 4. 

3. Wildhorse signed a $48,600,5% bank loan on November 1, 2016, due in 2 years. Interest is payable on the first day of each following month. 

4. Wildhorse receives a fee from Pizza Shop next door for all pizzas sold to customers using Wildhorse's facility. The amount owed for December is $320, which Pizza Shop will pay on January 4. (Hint: Use the Service Revenue account.) 

5. Wildhorse rented some of its unused warehouse space to a client for $6,480 a month payable the first day of the following month. It received the rent for the month of December on January 2. 3:19 AM A 23/22

For each situation, prepare the Journal entry to record the subsequent cash transaction in 2018. 

Answer 1

No	Date	Account Titles & Explanations	Debit	Credit
1	Dec. 31, 2017	Utilities Expense	$460
		Accounts Payable		$460
2	Dec. 31, 2017	Salaries & Wages expense ($3780/7*4)	$2160
		Salaries & Wages Payable		$2160
3	Dec. 31, 2017	Interest Expense ($48600 * 5%/12)	$203
		Interest Payable		$203
4	Dec. 31, 2017	Accounts receivable	$320
		Service Revenue		$320
5	Dec. 31, 2017	Accounts receivable	$6480
		Rent Revenue		$6480

No	Date	Account Titles & Explanations	Debit	Credit
1	Jan 11, 2018	Accounts Payable	$460
		Cash		$460
2	Jan 4, 2018	Salaries & Wages Expense	$1620
		Salaries 7 Wages Payable	$2160
		Cash		$3780
3	Jan 1, 2018	Interest Payable	$203
		Cash		$203
4	Jan 4, 2018	Cash	$320
		Accounts Receivable		$320
5	Jan 2, 2018	Cash	$6480
		Accounts Receivable		$6480