Explanation Adjusting entries : Adjusting entries are the journal entries which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting. Prepare the adjusting entry: Date Account Title and Explanation Debit ($) Credit ($) December 31 Interest expense (+E, -SE) 500 Interest payable(+L) 500 (To record the adjusting entry for Interest expense) Table (1) Interest expense is an expense account which is the component of stockholders’ equity. There is an increase in expense account which decreases the stockholders’ equity. Hence, debit Interest expense with $500. Interest payable is a liability. There is an increase in the liability. Hence credit, interest payable $500. T-account: T-account refers to an individual account, where the increases or decreases in the value of specific asset, liability, stockholder’s equity , revenue, and expenditure items are recorded...

6th Edition

ISBN: 9781260664386

Author: PHILLIPS, LIBB

Publisher: MCG

See similar textbooks

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

Videos

Question

Chapter 4, Problem 23ME

To determine

To prepare: The adjusting journal entry on December 31^st for the Company H&R and to post the entries in the separate T-account and report the adjusted balance.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 4, Problem 22ME

Chapter 4, Problem 24ME

Students have asked these similar questions

At December 31, the unadjusted trial balance of H&R Tacks reports Interest Payable of $0 and Interest Expense of $0. Interest incurred and owed in December totals $540. Required: Prepare the adjusting journal entry on December 31. Post the beginning balances and adjusting entries to the following T-accounts.

At December 31, the unadjusted trial balance of H&R Tacks reports Interest Payable of $0 andInterest Expense of $0. Interest incurred and owed in December totals $500. Prepare the adjustingjournal entry on December 31. In separate T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance.

For each of the above transactions, prepare the adjusting journal entry that is required on December 31,

Chapter 4 Solutions

FUNDAMENTALS OF FINANCIAL ACCOUNTING

Ch. 4 - Prob. 1Q Ch. 4 - Explain the relationships between adjustments and...Ch. 4 - Prob. 3Q Ch. 4 - Prob. 4Q Ch. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain the differences between depreciation...Ch. 4 - What is an adjusted trial balance? What is its...Ch. 4 - On December 31, a company makes a 59,000 payment...Ch. 4 - Using the information in question 8, determine the...Ch. 4 - Using the information in question 8, prepare the...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

The adjusting journal entry on December 31 st for the Company H&R and to post the entries in the separate T-account and report the adjusted balance.

Solution Summary: The author explains that adjusting entries are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts.

Concept explainers

Videos

To prepare: The adjusting journal entry on December 31^st for the Company H&R and to post the entries in the separate T-account and report the adjusted balance.

Want to see the full answer?

Chapter 4 Solutions

The adjusting journal entry on December 31 st for the Company H&amp;R and to post the entries in the separate T-account and report the adjusted balance.

Solution Summary: The author explains that adjusting entries are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts.

Concept explainers

Videos

To prepare: The adjusting journal entry on December 31st for the Company H&R and to post the entries in the separate T-account and report the adjusted balance.

Want to see the full answer?

Chapter 4 Solutions

The adjusting journal entry on December 31 st for the Company H&R and to post the entries in the separate T-account and report the adjusted balance.

To prepare: The adjusting journal entry on December 31^st for the Company H&R and to post the entries in the separate T-account and report the adjusted balance.