The Vigilante Company completed the following transactions during Year 1. Vigila

Question

The Vigilante Company completed the following transactions during Year 1. Vigilante's fiscal year ends on December 31.

Determined wages of $25,000 were earned but not yet paid on December 31 (disregard payroll taxes).

Prepare journal entries for each of these transactions.

Prepare the adjusting entries required on December 31.

Jan. 15 Purchased and paid for merchandise. The invoice amount was $15,800; assume a perpetual inventory system. Apr. 1 Borrowed $822,000 from Summit Bank for general use; signed a 10-month, 12% annual interest-bearing note for the money. June 14 Received a $33,000 customer deposit for services to be performed in the future. July 15 Performed $3,850 of the services paid for on June 14. Dec. 12 Received electric bill for $27,760. Vigilante plans to pay the bill in early January. 31

Determined wages of $25,000 were earned but not yet paid on December 31 (disregard payroll taxes).

2 4 6 Purchased and paid for merchandise. The invoice amount was $15,800; assume a perpetual inventory system Note: Enter debits before credits. Date General Journal Debit Credit January 15

Explanation / Answer

Date General Journal Debit Credit 15-Jan Merchandise inventory 15,800 cash 15,800 1-Apr Cash 822,000 notes payable 822,000 14-Jun Cash 33,000 unearned service revenue 33,000 15-Jul unearned service revenue 3,850 service revenue 3,850 12-Dec Utility expense 27,760 Accounts payable/utility payable 27,760 31-Dec Salary & wage expense 25,000 Salary & wages payable 25,000 31-Dec interest expense 73980 interest payable 73,980 (822000*12%*9/12)

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