Question

A. The company provided $2,200 in services to customers that are expected to pay the company sometime in January following the company's year-end.
b. Wage expenses of $1,200 have been incurred but are not paid as of December 31.

c. The company has a $5,200 bank loan and has incurred but not recorded an 8% interest expense of $416 for the year ended December 31. The company will pay the $416 interest in cash on January 2 following the company's year-end.

d. The company contracted with a firm for lawn services to be provided at a monthly fee of $520 with payment occurring on the 15th of the following month. Payment for December services will occur on January 15 following the company's year-end.

e. The company has earned $220 in Interest revenue from investments for the year ended December 31. The interest revenue will be received on January 15 following the company's year-end.

f. Salary expenses of $920 have been earned by supervisors but not paid as of December 31.

Prepare year-end adjusting journal entries as of December 31, 2017, for each of the above separate cases.

Answer 1

Answer:

You have to identify which account will affect each transaction and if the nature is Debit or Credit:

a. Sales (C) $ 2,200 and Accounts Receivable (D) $ 2,200

b. Wages expenses (D) $ 1,200 and Wages payables (C) $ 1,200

c. Interes expenses (D) $ 416 and Interes payable (C) $ 416

d. Sales (C) $ 520 and Accounts Receivable (D) $ 520

e. Interes income (C) $ 220  and Other Accounts Receivable (D) $ 220

f. Salary expenses (D) $ 920 and Salaries payables (C) $ 920

Answer 2

Answer:

Year end journal entries are given below in explanation

Explanation:

a. Company provided service to customer which means that company has earned revenue

Account                                             Dr                  Cr

Accounts Receivable                       2200

Sales/Revenue                                                        2200

b. Wages expense have incurred but are not paid yet. Thus, its Liability should be booked.

Wages Expense                                1200

Wages payable / Liability                                        1200

c. The company has taken loan from the bank. Interest due on the loan is 416 but are not paid yet.

Interest Expense                                416

interest Payable                                                       416

d.  The company had contract for lawn service. To book the expense of lawn service

Lawn Service Expense                        520

Lawn Service Payable                                                520

e. The company has also made some investment. $ 220 is earned on that investment. to book the non operating income

Interest revenue receivable                220

Interest revenue - Non operating income                   220

f. Salaries of Supervisor is due on  31 st December but are not paid yet.

Salaries Expense                                   920

Salaries payable                                                              920