Question

A. M&R Company provided $2,000 in services to customers that are expected to pay the company sometime in January following the company’s year-end.
B. Wage expenses of $1,000 have been incurred but are not paid as of December 31.
C. M&R Company has a $5,000 bank loan and has incurred (but not recorded) 8% interest expense of $400 for the year ended December 31. The company will pay the $400 interest in cash on January 2 following the company’s year-end.
D. M&R Company hired a firm to provide lawn services during December for $500. M&R will pay for December lawn services on January 15 following the company’s year-end.
E. M&R Company has earned $200 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 $900 have been earned by supervisors but not paid as of December 31.
Prepare year-end adjusting journal entries for M&R Company as of December 31 for each of the above separate cases.

Answer 1

Answer and Explanation:

The Journal entries are shown below:-

a. Accounts receivable Dr, $2,000  

          To Service revenue $2,000

(Being service revenue is recorded)

b. Wages expenses Dr, $1,000  

          To Wages payable $1,000

(Being wage expenses is recorded)

c. Interest expenses Dr, $400  

    To Interest payable $400

(Being interest expenses is recorded)

d. Lawn service expenses $500  

    To Accounts payable $500

(Being lawn service expenses is recorded)

e. Interest receivable $200  

     To Interest revenue $200

(Being interest revenue is recorded)

f. Salaries expenses $900  

     Salaries payable $900

(Being salary expenses is recorded)