Learning Objectives 1, 2 P11-25A Journalizing and posting liabilities The genera

Question

Learning Objectives 1, 2 P11-25A Journalizing and posting liabilities The general ledger of Seal N Ship at june 30, 2018, the end of the company's fisca year, includes the following account balances before payroll and adjusting entries Id. Rent Revenue $3,000 Accounts Payable Interest Payable Salaries Payable Employee Income Taxes Payable FICA-OASDI Taxes Payable FICA-Medicare Taxes Payable Federal Unemployment Taxes Payable State Unemployment Taxes Payable Unearned Rent Revenue Long-term Notes Payable 114,000 7,200 210,000 The additional data needed to develop the payroll and adjusting entries at June 30 are as follows: a. The long-term debt is payable in annual installments of $42,000, with the next installment due on July 31. On that date, Seal-N-Ship will also pay one year's inter- est at 9%). Interest was paid on July 31 of the preceding year. Make the adjusting entry to accrue interest expense at year-end b. Gross unpaid salaries for the last payroll of the fiscal year were $4,700. Assume that employee income taxes withheld are $910 and that all carnings are subject to OASDI c. Record the associated employer taxes payable for the last payroll of the fiscal year, $4,700. Assume that the carnings are not subject to unemployment compensation taxes d. On February 1, the company collected one year's rent of $7.200 in advance. Requirements 1. Using Taccounts, open the listed accounts and insert the unadjusted June 30 balances. 2. Journalize and post the June 30 payroll and adjusting entries to the accounts that you opened. Identify each adjusting entry by letter. Round to the nearest dollar. Prepare the current liabilities section of the balance sheet at June 30, 2018. 3.

Explanation / Answer

T Accounts Long Term Notes Payable Date Particulars Debit Date Particulars Credit 7/31/2018 To Installment payable      42,000 6/30/2018 By Balance Brought Forward 210000 7/31/2018 To Interest payable      18,900 8/31/2018 To Balance Carried Forward    149,100    210,000 210000 Salaries Payable Date Particulars Debit Date Particulars Credit 6/30/2018 To Employee Income Taxes Withheld            910 6/30/2018 By Gross Salaries Payable 4700 6/30/2018 To Net Salaries Payable         3,790         4,700 4700 Journal Entries Debit Credit Long Term Notes Payable    149,100 Installments Payable            42,000 Interest payable            18,900 (For Installment & Interest Payable) Salaries Payable         3,790 Employee Income Taxes Withheld            910 Gross Salaries Payable              4,700 Current Laibilities as on June 30, 2018 Accounts Payable    114,000 Long Term Notes Payable    149,100 Salaries Payable         3,790 Emplyoee Income Taxes Withheld payable            910 Employer Taxes Paayble         4,700 Total Current Liabilities    272,500 Working A Annual Installment of Long Term Debt      42,000 B Long Term Notes payable    210,000 C=B/A Number of Installments                 5 D Interest Rate 9% E=B*D Interest to be paid on unpaid balance      18,900 F Gross Unpaid salaries         4,700 G Employee Income Taxes witheld            910 H=F-G Salaries Payable         3,790 I Employer Taxes Payable         4,700 J Rent Received in Advance         7,200

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