Answer:
A. Adjusting Entries on April 30:
Debit Legal Services Expense $3,500
Credit Legal Services Expense Payable $3,500
To record April legal services expense.
Debit Notes Interest Expense $1,932
Credit Notes Interest Payable $1,932
To record accrued interest expense.
Debit Salaries Expense $5,600
Credit Salaries Expense Payable $5,600
To record 2 days salaries accrued.
B. Journal Entries during May:
May 3:
Debit Salaries Expense Payable $5,600
Debit Salaries Expense $8,400
Credit Cash Account $14,000
To record payment of salaries.
May 12:
Debit Legal Services Expense Payable $3,500
Credit Cash Account $3,500
To record the payment of legal services for April.
May 20:
Debit Notes Interest Payable $5,787
Credit Cash Account $5,787
To record payment of interest on notes.
Explanation:
Adjusting entries are made at the end of an accounting period to record expenses and revenue that have accrued but are not yet paid or received. They are also used to account for expenses and revenue made in advance. The purpose is to ensure that the accounting records reflect the period's actual expenses and revenue incurred and earned.
