The following three separate situations require adjusting journal entries to prepare financial statements as of April 30. For each situation, present both: ∙ The April 30 adjusting entry. ∙ The subsequent entry during May to record payment of the accrued expenses. Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Prepaid Interest; Salaries Payable; Interest Payable; Legal Services Payable; Unearned Revenue; Revenue; Salaries Expense; Interest Expense; Legal Services Expense; Depreciation Expense. a. On April 1, the company retained an attorney for a flat monthly fee of $3,500. Payment for April legal services was made by the company on May 12. b. A $900,000 note payable requires 12% annual interest, or $9,000, to be paid at the 20th day of each month. The interest was last paid on April 20, and the next payment is due on May 20. As of April 30, $3,000 of interest expense has accrued. c. Total weekly salaries expense for all employees is $10,000. This amount is paid at the end of the day on Friday of each five-day workweek. April 30 falls on a Tuesday, which means that the employees had worked two days since the last payday. The next payday is May 3.
The following three separate situations require adjusting
∙ The April 30
∙ The subsequent entry during May to record payment of the accrued expenses.
Entries can draw from the following partial chart of accounts: Cash;
a. On April 1, the company retained an attorney for a flat monthly fee of $3,500. Payment for April legal services was made by the company on May 12.
b. A $900,000 note payable requires 12% annual interest, or $9,000, to be paid at the 20th day of each month. The interest was last paid on April 20, and the next payment is due on May 20. As of April 30, $3,000 of interest expense has accrued.
c. Total weekly salaries expense for all employees is $10,000. This amount is paid at the end of the day on Friday of each five-day workweek. April 30 falls on a Tuesday, which means that the employees had worked two days since the last payday. The next payday is May 3.
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