(TCO B) Adjusting entries: Seymor Stars is the new owner of Night Computer Servi

Question

(TCO B) Adjusting entries: Seymor Stars is the new owner of Night Computer Services. At the end of August 201X, his first month of ownership, Seymor is trying to prepare monthly financial statements. At August 31, Seymor owed his employees $3,000 in wages that will be paid on September 1. At the end of the month he had not yet received the month’s utility bill. Based on past experience, he estimated that the bill would be approximately $400. A telephone bill in the amount of $700 covering August charges is unpaid at August 31. You are to provide the missing adjusting entries that must be made. For each journal entry write DR for debit and CR for credit.

Explanation / Answer

Solution: Jounal Date Particulars Debit Credit Aug-31 Salaries and Wages 3,000.00 Salaries and Wages Payable 3,000.00 Aug-31 Utility Expenses      400.00 Utility Expenses Payable      400.00 Aug-31 Telephone Expenses      700.00 Telephone Expenses Payable      700.00

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