Question

Financial Accounting TA, Test of Chapters 3 and 4 14. Blue's annual accounting period ends on December 31, 2019. The following information concerns the adjusting entries to be recorded as of that date (18 Points) onth of December but had not received an invoice a. The company has 15 employees, pany has 15 employees, who earn a total of $2,820 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31 2019. is a Tuesday, and all 15 employees worked the first two days of that week. Because New Yearlen paid holiday, they will be paid salaries for five full days on January 6, 2020. b. The company incurred electricity costs of $10,000 for the month of December but had not rec from the utility company by December 31, 2019. ling it owns, it rented their extra space to a tenant 2019. The rent was paid on time on November 1, and the amount nant has not paid the December rent. The tenant, who has promised to pay both December and January e. Since the company is not large enough to occupy the entire building it owns, it rented their at $2,600 per month, starting on November 1, 2019. The rent was paid on time on received was credited to the Rent Earned account. However, the tenant has not paid the Dee company has worked out an agreement with the tenant, who has promis rent in full on January 15. The tenant has agreed not to fall behind again. Requirement: Use the information to prepare adjusting entries as of December 31, 2016.

Answer 1

Solution:

Adjusting Entries as on December 31,2016

Account Titles and Explanation	Debit	Credit
Salaries Expense(2820+2820)	$            5,640
Salaries Payable		$                 5,640
(To record salary expense payable)
Utility Expense	$          10,000
Account Payable/Utility Payable		$               10,000
(To record utility expense payable)
Rent Receivable	$            2,600
Rent Earned Account(Revenue)		$                 2,600
(To record rent receivable)

Notes:

1) It is assumed that $2,820 per day is for all 15 employees salary

2) In 2nd entry , we can credit either account payable or utility payable account.