Answer:
Lakeview Company
Journal entries
A. Payroll
Debit Wages with $94,500
Credit Cash with $94,500
(Being December wages paid employees in Cash)
B. Rent collection Journal Dec 10.
Debit cash with $6,750
Credit Deferred Revenue with $6,750
(Being 30 days rent collected in advance. Rent expires Jan 10)
C. Rent Collected (adjusted Journal)
Debit Deferred Revenue Account with $4,500
Credit Rent Account with $4,500
(Being rent income applicable to this years records)
3.. Liability recognition
Debit Employee income taxes with $12,000
Debit FICA employee deductions with $9,000
Debit employees contribution to cancer research with $4,500
Credit Employee income taxes payable account with $12,000
Debit FICA employee deductions payable account with $9,000
Debit employees contribution to cancer research payables account with $4,500
(Being deduction from employee December wages)
Debit FICA employer deductions with $9,000
Debit State & Fed unemployment taxes (employer) account with $1,050
Credit FICA employer deductions payable account with $9,000
Credit State & Fed unemployment taxes (employer) payable account with $1,050
(Being employer contribution and taxes incidental to December Wage payment)
In the Balance sheet.
Current liabilities.
Deferred Revenue = $2,250
Employee income taxes payable account = $12,000
FICA employee deductions payable account = $9,000
employees contribution to cancer research payables account = $4,500
FICA employer deductions payable account = $9,000
State & Fed unemployment taxes (employer) payable account = $1,050
Total current liability = $37,800
