Prepare year end adjusting entries for these situations. 1. Accrued interest on
ID: 2393431 • Letter: P
Question
Prepare year end adjusting entries for these situations.
1. Accrued interest on notes payable is $80.
2. Income taxes incurred but not paid or recordered total to $1,000.
3. Legal fees of $5000 were received in advanced. By the end of the year, 80% of the fees were earned.
4. Services totaling $1,000 have been completed but not recorded or billed.
5. Payroll for the work week (five days) to be paid on Friday is $10,000. The year ends on a Wednesday.
6. Supplies available for use during the year total to $3,400. By the end of the year, there is only$1,700 in supplies remaining.
7. Depreciation for the year total to $3,000.
Explanation / Answer
Adjusting Entries S.No. Particular Amount (Dr) Amount(Cr) 1 Interest Expenses $ 80.00 To Interest Accrued $ 80.00 (Being amount of accured interest on Note Payable) 2 Income Tax Expense $ 1,000.00 To Income Tax Payable $ 1,000.00 (Being amount of Income Tax Expense paid but not recorded) 3 Unearned Legal Fees($5000*80%) $ 4,000.00 To Legal Fees Earned $ 4,000.00 4 (Being amount of Legal fees earned) Accounts Receivable $ 1,000.00 To Legal Fees Earned $ 1,000.00 (Being amount of service completed but not billed) 5 Salaries Expenses $ 6,000.00 To Salaries Expenses Payable $ 6,000.00 (Being amount due for 3 days Monday,Tueday and Wednesday at the rate of ($10000/5)=$2000 per day) 6 Supplies Expenses($3400-$1700) $ 1,700.00 To Spplies $ 1,700.00 (Being amount of Supplies Expenses) 7 Depreciation expenses $ 3,000.00 To Accumulated Depreciation $ 3,000.00 (Being amount of depreciation)