Question

Zheng Corporation had the following selected transactions in the month of March. The company adjusts its accounts monthly. 1. The company has a 15%, $12,110 bank loan payable due in one year. Interest is payable on the first day of each following month and was last paid on March 1. 2. At the end of March, the company earned $350 interest on its investments. The bank deposited this amount in Zheng’s cash account on April 1. 3. Zheng has five employees who each earn $430 a day. Salaries are normally paid on Mondays for work completed Monday through Friday of the previous week. Salaries were last paid on Monday, March 26. March 31 falls on a Saturday this year. Salaries will be paid next on Monday, April 2. 4. At the end of March, the company owed the utility company $630 and the telephone company $320 for services received during the month. These bills were paid on April 10. (Hint: Use the Utilities Expense account for the utility and telephone services.) 5. At the end of March, Zheng has earned service revenue of $3,600 that it has not yet billed. It bills its clients for this amount on April 4. On April 30, it collects $2,200 of this amount due.

(a) For each of the above situations, prepare the adjusting journal entry required at March 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round all amounts to the nearest dollar. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Date Account Titles and Explanation Debit Credit

Answer 1

Adjusting entry

no	General Journal	Debit	Credit
1	Interest expense (12110*15%*10/12)	1514
	Interest payable		1514
2	Interest receivable	350
	Interest revenue		350
3	Salaries expense (430*5)	2150
	Salaries payable		2150
4	Utilities expense	630
	Telephone service	320
	Account payable		950
5	Account receivable	3600
	Service revenue		3600