Charger Inc. had the following items that require adjusting entries at the end of the year. a. Charger pays its employees $4,000 every Friday for a 5-day work week. This year December 31 falls on a Wednesday. b. Charger earned income of $790,000 for the year for tax purposes. Its effective tax rate is 35%. These taxes must be paid by April 15 of next year. c. Charger borrowed $240,000 with a note payable dated August 1. This note specifies 6%. The interest and principal are due on March 31 of the following year. d. Charger’s president earns a bonus equal to 10% of income in excess of $620,000. Income for the year was $790,000. This bonus is paid in May of the following year and any expense is charged to wages expense.   Required:   Prepare the adjusting journal entries to record these transactions at the end of the current year.

PAYROLL ACCT.,2019 ED.(LL)-TEXT
19th Edition
ISBN:9781337619783
Author:BIEG
Publisher:BIEG
Chapter5: Unemployment Compensation Taxes
Section: Chapter Questions
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Charger Inc. had the following items that require adjusting entries at the end of the year.
a. Charger pays its employees $4,000 every Friday for a 5-day work week. This year December 31 falls on a Wednesday.
b. Charger earned income of $790,000 for the year for tax purposes. Its effective tax rate is 35%. These taxes must be paid by April 15 of next year.
c. Charger borrowed $240,000 with a note payable dated August 1. This note specifies 6%. The interest and principal are due on March 31 of the following year.
d. Charger’s president earns a bonus equal to 10% of income in excess of $620,000. Income for the year was $790,000. This bonus is paid in May of the following year and any expense is charged to wages expense.
 
Required:
  Prepare the adjusting journal entries to record these transactions at the end of the current year.
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