Chapter 3, Problem 5E

Exercise 3-5 Adjusting and paying accrued expenses P3

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; Salaries Payable; Interest Payable; Legal Services Payable; Unearned Revenue; Revenue; Salaries Expense; Interest Expense; Legal Services Expense; and Depreciation Expense.

a. On April 1. the company hired an attorney for a flat monthly fee of S3.500. Payment for April legal services was made by the company on May 12.
b. As of April 30, S3_:000 of interest expense has accrued on a note payable. The full interest payment of S9₌000 on the note is due on May 20.
c. Total weekly salaries expense for all employees is 510,000. 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.