Question

E3-21 (similar to) Question Help Consider the following situations: (Click the icon to view the situations.) Assume the company records adjusting entries monthly. Journalize the adjusting entries needed as of January 31. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) a. Business receives $2,000 on January 1 for 10-month service contract for the period January 1 through October 31. (When the cash was received on January 1, assume that a liability account was credited. Assume services are performed evenly each month throughout the term of the contract.) Date Accounts and Explanation Debit Credit Jan. 31 i More Info a. b. Business receives $2,000 on January 1 for 10-month service contract for the period January 1 through October 31. (Assume services are performed evenly each month throughout the term of the contract.) Total salaries for all employees is $3,600 per month. Employees are paid on the 1st and 15th of the month. Work performed but not yet billed to customers for the month is $700. The company pays interest on its $14,000, 5% note payable of $58 on the first day of each month. c. Print Done Choose from any list or enter any number in the input fields and then click Check Answer. ?

Answer 1

Date	Accounts and Explanation	Debit	Credit
Jan. 31	Unearned service revenue	$200
	Service revenue		$200
	( To record unearned service revenue earned)
Jan.31	Salaries expense	$1,800
	Salaries payable		$1,800
	( To record salaries expense)
Jan. 31	Accounts receivable	$700
	Service revenue		$700
	( To record service revenue)
Jan. 31	Interest expense	$58
	Interest receivable		$58
	( To record interest expense)

a.

Service revenue for 10 months = $2,000

Service revenue for 1 month = 2,000 x 1/10

= $200

b.

Salaries expense for 1 month = $3,600

Salaries expense for 15 days = 3,600 x 1/2

= $1,800

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