On January 1, 2010, the ledger of Glennon Company contained these liability acco

Question

On January 1, 2010, the ledger of Glennon Company contained these liability accounts.

Accounts payable $49,020
Sales Taxes Payable 7,316
Unearned service revenue 26,330

During January the following selected transactions occurred.

Jan. 1 Borrowed $21,300 in cash from Midland Bank on a 4-month 8%, $21,300 note.

Jan. 5 Sold merchandise for cash totaling $7,518, which includes 5% sales taxes.

Jan. 12 Provided services for customers who had made advance payment of $17,944. (Credit Service Revenue.)

Jan. 14 Paid state treasurer's department for sales taxes collected in December 2009, $6,696.

Jan. 20 Sold 550 units of a new product on credit at $47 per unit, plus 5% sales tax.

During January the company's employees earned wages of $76,250. Withholdings related to these wages were $5,833 for Social Security (FICA), $5,452 for federal income tax, and $1,525 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. No entry had been recorded for wages or payroll tax expense as of January 31.  

Journalize the January transactions. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)

Explanation / Answer

1/1 DR Cash 21,300 CR Notes Payable 21,300 1/5 DR Cash 7,518 CR Sales Revenue 7,160 CR Sales Tax Payable 358 1/12 DR Unearned Service Revenue 17,944 CR Service Revenue 17,944 1/14 DR Sales Tax Payable 6,696 CR Cash 6,696 1/20 DR Accounts Receivable 27,142.50 CR Sales Revenue 25,850 CR Sales Tax Payable 1,292.50 1/31 DR Wage Expense 76,250 CR Wages Payable 63,440 CR FICA Payable 5,833 CR FIT Payable 5,452 CR SIT Payable 1,525

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