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Journalizing and posting liabilities
Learning Objective 1, 2
1d. Rent Revenue $3,000
The general ledger of Seal-N-Ship at June, 2018, the end of the company’s fiscal year, included the following account balances before payroll and
| Accounts Payable | $ 114,000 |
| Interest Payable | 0 |
| Salaries Payable | 0 |
| Employee Income Taxes Payable | 0 |
| FICA—OASDI Taxes Payable | 0 |
| FICA—Medicare Taxes Payable | 0 |
| Federal |
0 |
| State Unemployment Taxes Payable | 0 |
| Unearned Rent Revenue | 7,200 |
| Long-term Notes Payable | 210,000 |
The additional data needed to develop the payroll and adjusting entries at June 30 are as follows:
a. The long-term debt is payable m annual installments of $42,000, with the next installment due on July 31. On that date, Seal-N-Ship will also pay one year’s interest at 9%. Interest was paid on July 31 of the preceding year. Make the adjusting entry to accrue interest expense at year-end.
b. Gross unpaid salaries for the last payroll of the fiscal year were $4,700. Assume that employee income taxes withheld are $910 and that all earnings are subject to OASDI.
c. Record the associated employer taxes payable for the last payroll of the fiscal year, $4,700. Assume that the earnings are not subject to unemployment compensation taxes
d. On February 1, the company collected one year’s rent of $7,200 in advance.
Requirements
1. Using T-accounts, open the listed accounts and inset the unadjusted June 30 balances.
2. Journalize and post the June30 payroll and adjusting entries to the accounts that you opened. Identify each adjusting entry by letter. Round to the nearest dollar.
3. Prepare the current liabilities section of the
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Chapter 11 Solutions
Horngren's Accounting: The Managerial Chapters, Student Value Edition (12th Edition)
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