(Adjusting Entries) Scott Little is the new owner of Summit Computer LLC. At the

Question

(Adjusting Entries) Scott Little is the new owner of Summit Computer LLC. At the end of August 2012, his first month of ownership, Scott is trying to prepare monthly financial statements. Below is some information related to unrecorded expenses that the business incurred during August.

$3,120

 

 

 

3. On August 1, Scott  borrowed $65,000 from a local bank on a 20 year mortgage. The Annual interest rate is 5.5%. 

 

 

 

 

Instructions:
Prepare the adjusting journal entries as of August 31, 2012.

(Adjusting Entries) Scott Little is the new owner of Summit Computer LLC. At the end of August 2012, his first month of ownership, Scott is trying to prepare monthly financial statements. Below is some information related to unrecorded expenses that the business incurred during August.

      1. At August 31, Scott owed his employees salaries and wages that will be paid on September 1 in the amount of 

$3,120

 

 

2. At the end of the month he had not yet received the month's utility bill. Based on past experience, he estimated the bill would be approximately $635

 

3. On August 1, Scott  borrowed $65,000 from a local bank on a 20 year mortgage. The Annual interest rate is 5.5%. 

 

 

 

 

  4. A telephone bill in the amount of $171 covering August charges is unpaid at  August 31.  

 

Instructions:
Prepare the adjusting journal entries as of August 31, 2012.

    1 Account Title Amount   Account Title   Amount Text / Memo line   2 Account Title Amount   Account Title   Amount Text / Memo line   3 Account Title Amount   Account Title   Amount Text / Memo line   4 Account Title Amount   Account Title   Amount Text / Memo line  

Explanation / Answer

1. Dr. Wages expense 3120 Cr. Wages payable 3120 2. Dr. Utilities expense 635 Cr. Utilities payable 635 3. Dr. Interest expense 298 Cr. Interest payable 298 4. Dr. Misc expense 171 Cr. Misc expense payable 171

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