Question

4. A company pays $1,900 cash to employees for work performed during the month. Record the payment using (a) accrual-basis accounting and (b) cash-basis accounting

5. A company borrows $40,000 with 8% interest on October 1, 2018. This amount plus interest is due on September 30, 2019.

6. A company lends $45,000 with 9% interest on May 1, 2018. This amount plus interest is due on April 30, 2019.

Answer 1

Transaction	Account title and explanation	Debit	Credit
4 (a)	Salaries and wages payable	$ 1,900
	Cash		$ 1,900
	(To record the payment of salaries on accrual basis)
4 (b)	Salaries and wages expenses	$ 1,900
	Cash		$ 1,900
	(To record the payment of salaries on cash basis)
5	Cash	$ 40,000
	Notes payable		$ 40,000
	(To record the money borrowed at 8%, payable on September 30, 2019)
6	Note receivable	$ 45,000
	Cash		$ 45,000
	(To record the money lend at 9%, due on April 30, 2019)