Oriole Company is the new owne
Oriole Company is the new owner of Oriole’s Computer Services.At the end of July 2017, her first month of ownership, Oriole istrying to prepare monthly financial statements. She has thefollowing information for the month.
| 1. | At July 31, Oriole owedemployees $1,940 in salaries that the company will pay inAugust. | |
| 2. | On July 1, Oriole borrowed$21,000 from a local bank on a 12-year note. The annual interestrate is 8%. | |
| 3. | Service revenue unrecorded inJuly totaled $1,600. |
Prepare the adjusting entries needed at July 31, 2017.(If no entry is required, select “No Entry” for theaccount titles and enter 0 for the amounts. Credit account titlesare automatically indented when the amount is entered. Do notindent manually.)
|
No. |
Account Titles and Explanation |
Debit |
Credit |
| 1. | |||
| 2. | |||
| 3. | |||
Answer:
| Number | Account Titles andExplanation | Debit | Credit |
| 1 | Salary Expense A/c | 1,940 | |
| Salary Payable A/c | 1,940 | ||
| (Adjusting entry forsalary) | |||
| 2 | Interest Expense A/c | 140 | |
| Interest Payable A/c | 140 | ||
| (Payable adjusting entry) | |||
| 3 | Cash A/c | 1,600 | |
| Accrued Revenue A/c | 1,600 | ||
| (Unrecorded revenue) |
Interst expense found by 21000 x 8% x 1/12
Payable account is current liability
in the entry of accrued revenue debit may become accountrecievable/. Here i considered cash received before billing
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