2:nn a. On April 1, the company retained an attorney for a flat monthly fee of $

Question

2:nn a. On April 1, the company retained an attorney for a flat monthly fee of $3,000. Payment for Apri legal services was made by the monh The b. A $920,000 note payable requires 81% annual interest, or $6,210, to be paid at the 20th day of eacn month. The interest was last c. Total weekly salaries expense for all employees is $13,000. This amount is paid at the end of the day on Friday of each five-day company on May 12 paid on April 20, and the next payment is due on May 20. As of April 30, $2.070 of interest expense has accrued workweek April 30 falls on a Tuesday. which means that the employees had worked two days since the last payday. The next wondoy 2o of . 90 payday is May 3 The above three separate situations require adjusting journal entries to prepare financial statements as of April 30. For each situation, present both The April 30 adjusting entry The subsequent entry during May to record payment of the accrued expenses (Use 300 days a year. Do not round Intermedlate calculations.) Journal entry worksheet On April 1. the company retained an attorney for a flat monthly fee of $3,000 Payment for April legal services was made by the company on May 12 Prepare the required adjusting entry, if any Note Enter deuits before credts Debit Credit Apr 30 Record entry Clear entry

Explanation / Answer

Solution:

Journal Entries Event Date Particulars Debit Credit 1 30-Apr Legal expense Dr $3,000.00              To Legal Fees Payable $3,000.00 (Being legal expense due for april) 2 12-May Legal fees payable Dr $3,000.00              To Cash $3,000.00 (To record payment of legal fees) 3 30-Apr Interest Expense Dr $2,070.00              To Interest payable $2,070.00 (Being interest expense accrued on note) 4 20-May Interest Expense Dr $4,140.00 Interest payable Dr $2,070.00              To Cash $6,210.00 (To record payment of interest) 5 30-Apr Salaries Expenses Dr ($13,000/5*2) $5,200.00        To Salaries payable $5,200.00 (Being salaries expense accrued) 6 3-May Salaries Expense Dr $7,800.00 Salaries Payable Dr $5,200.00              To Cash $13,000.00 (To record payment of salaries)

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