Question

The following information is available for the year-ended December 31,2018 for Sport Court Resurfacing (SCR) Corporation: On April 1,2018 signed a bank loan for $10,200 with interest and principal repayable in one-year. The interest rate on the loan is 4%. SCR pays its employees $ 32,700 every other Friday which reflects a 2-week pay period or 10 working days. December 31, 2018 falls on a Monday so employees will not get paid for the work they completed on this day until January 11,2019 Estimated income tax payable for the year end is $ 6,870 which is payable January 31,2019. Utility expenses of $420 for the month of December were unrecorded and unpaid. They are due anuary 21,2019. SCR provided tennis court resurfacing to a local tennis club.At the end of the year the club owed SCR$ 16,700.SCR billed the club on January 2,2019 and collected the full amount on January 10,2019. 1. 2. 3. 4. 5.

Answer 1

Following will be the journal entries :-

Date	accounts title	debit	credit
Dec 31	Interest exp To interest payable (Being interest due for 9 months recorded as 10200x4%x9/12	306	306
Dec 31	salary To salary payable (Being salary due for 1 day recorded as 32700x1/10)	3270	3270
Dec 31	Income tax To income tax payable (Being income tax for the year payable on Jan 31)	6870	6870
Dec 31	Utilities exp To utilities payable (Being utility for the year payable on Jan 21 next year)	420	420
Dec 31	Accrued billings To revenue earned (Being service provided accrued)	16700	16700
Jan 10	Cash To accrued Billings (Being services provided in previous year which were unbilled now billed and AMT. Collected)	16700	16700
Jan 11	salary payable Salary To Cash (Being salary for this year and for 1 day of previous year paid)	3270 29430	32700
Jan 21	utilities payable To cash (Being utilities payable paid)	420	420
Jan 31	income tax payable To cash (Being income tax for the previous year paid)	6870	6870
March 31	Loan Interest payable Interest exp To cash (Being loan repaid along with interest and int. For the year also recorded)	10200 306 102	10608