Answer:
Journal Entries for April and May
a. April 30:
Debit Legal Fee Expense $3,500
Credit Legal Fee Payable $3,500
To record the legal fee expense for April.
May 12:
Debit Legal Fee Payable $3,500
Credit Cash $3,500
To record the payment of April legal fee.
b. April 30:
Debit Interest Expense $2,430
Credit Cash $1,620
Credit Interest Expense Payable $810
To record accrued interest expense
May 20:
Debit Interest Expense Payable $810
Credit Cash $810
To record the payment of accrued interest.
c. April 30:
Debit Salary Expense $5,600
Credit Salary Expense Payable $5,600
To record the salary expense for 2 days accrued.
May 3:
Debit Salary Expense Payable $5,600
Debit Salary Expense $8,400
Credit Cash $14,000
To record the payment of salary for the week.
Explanation:
We have used the journal entries to adjust accrued expenses and also to record the actual payment when they occur. Journal entries help to record transactions as they occur and to make adjustments at the end of the accounting period so that accruals, prepayments, deferred revenue, and depreciation expense are properly recorded when they occur and not when payment is made.
