Question

Kingbird, Inc. 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 $485 was unrecorded on December 31. Kingbird paid the bill on January 11. 2. Kingbird is open 7 days a week and employees are paid a total of $3,990 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. Kingbird signed a $51,300, 5% bank loan on November 1, 2016, due in 2 years. Interest is payable on the first day of each following month (For example, interest incurred during November is paid on December 1.). 4. Kingbird receives a fee from Pizza Shop next door for all pizzas sold to customers using Kingbird’s facility. The amount owed for December is $340, which Pizza Shop will pay on January 4. (Hint: Use the Service Revenue account.) 5. Kingbird rented some of its unused warehouse space to a client for $6,840 a month, payable the first day of the following month. It received the rent for the month of December on January 2.

Answer 1

Journal Entries:
Date	Acc. Titles	Debit $	Credit $
1	Utility expenses	485
	Accounts Payable		485
	(being utility expenses bill recorded)
2	Wages expense	2280		3990*4/7
	Wages Payable		2280
	(being wages for 4 days made due)
3	Interest expense	213.75		51300*5%*1/12
	Interest payable		213.75
	(interest for Dec. on Note made payable)
4	Accounts Receivable	340
	Service Revenue		340
	(Fees Revenue made receivable )
5	Rent receivable	6840
	Rent revenue		6840
	(being rent revenue made receivable)