Question

Linda Williams is the new owner of Linda’s Computer Services. At the end of July 2022, her first month of ownership, Linda is trying to prepare monthly financial statements. She has the following information for the month.
1. At July 31, Linda owed employees $1,950 in salaries that the company will pay in August.
2. On July 1, Linda borrowed $18,000 from a local bank on a 12-year note. The annual interest rate is 10%.
3. Service revenue unrecorded in July totaled $1,600.
Prepare the adjusting entries needed at July 31, 2022. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Answer and Explanation:

The Journal entries are shown below:-

1. Salaries expenses Dr, $1,950

          To Salary payable $1,950

(Being salaries expense is recorded)

2. Interest expense Dr, $150

          To Interest payable $150

(Being interest expense is recorded)

3. Accounts receivable Dr, $1,600

        To Service revenue $1,600

(Being sales revenue is recorded)