Chapter 2: Accrued Expense - Edubirdie

University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

261

Pages:

1
Author:

stud_ice13

a. Adjusting Entry for Salaries Payable 1. Determine the current balance: o Salaries Payable equals $0 (no salaries recorded yet). 2. Determine the required balance: o Salaries expense of $5,000 has been incurred but not yet paid, so Salaries Payable should equal $5,000. 3. Record the adjusting entry: o Debit Salaries Expense: $5,000 (This increases the expense account, reflecting the incurred expense.) o Credit Salaries Payable: $5,000 (This increases the liability account, representing the amount owed to employees.) Adjusting Entry: bash Debit: Salaries Expense $5,000 Credit: Salaries Payable $5,000 b. Adjusting Entry for Interest Payable 1. Determine the current balance: o Interest Payable equals $0 (no interest recorded yet). 2. Determine the required balance: o Interest of $1,000 has accrued but is not yet paid, so Interest Payable should equal $1,000. 3. Record the adjusting entry: o Debit Interest Expense: $1,000 (This increases the expense account to reflect the accrued interest.) o Credit Interest Payable: $1,000 (This increases the liability account to reflect the amount owed.) Adjusting Entry: bash Debit: Interest Expense $1,000 Credit: Interest Payable $1,000

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