Andy Roddick is the new owner of Ace Computer Services. At the end of August 201
ID: 2487107 • Letter: A
Question
Andy Roddick is the new owner of Ace Computer Services. At the end of August 2014, his first month of ownership, Roddick is trying to prepare monthly financial statements. Below is some information related to unrecorded expenses that the business incurred during August. (a) At August 31, Roddick owed his employees $3,698 in salaries and wages that will be paid on September 1. (b) At the end of the month, he had not yet received the month's utility bill. Based on past experience, he estimated the bill would be approximately $759. (c) On August 1, Roddick borrowed $36,000 from a local bank on a 15-year mortgage. The annual interest rate is 8%. (d) A telephone bill in the amount of $170 covering August charges is unpaid at August 31. Prepare the adjusting journal entries as of August 31, 2014, suggested by the information above.Explanation / Answer
a)
Salaries & Wages Expense.........................3,698
Salaries and wages payable.....................................3,698
b)
Utilities expense............................................759
Utilities payable..........................................................759
c)
Interest expense............................................240 (36000*0.08/12)
Interest payable......................................................240
d)
Telephone expenses......................................170
Telephone expenses payable.................................170