Question

Carla Vista Company has a September 30 fiscal year end and prepares adjusting entries on an annual basis. The trial balance included the following selected accounts:

Accumulated depreciation		$4,650
Depreciation expense		0
Interest expense		3,400
Interest payable		0
Interest receivable		0
Interest revenue		0
Salaries expense		155,000
Salaries payable		0

Additional information for its September 30, 2021, year-end adjustments:

1.		Carla Vista has a two-year, 3.5% note receivable for $4,800 that was issued on April 1, 2021. Interest is payable every six months, on October 1 and April 1. Principal is payable at maturity. Carla Vista collected the correct amount on October 1, 2021.
2.		Accrued salaries as at September 30, 2021, were $2,300. Payroll totalling $2,830 was paid on October 2, 2021.
3.		Carla Vista has a five-year, 5% note payable for $81,600 issued in 2019. Interest is payable quarterly on January 31, April 30, July 31, and October 31 each year. Carla Vista paid the correct amounts in 2021.
4.		Depreciation expense for the year ended September 30, 2021, was $4,650.

Prepare T accounts and record the September 30, 2021, balances.

Salaries Expense
Sept. 30 Bal.		Sept. 30 Bal.
Interest Expense
Sept. 30 Bal.		Sept. 30 Bal.
Accumulated Depreciation
Sept. 30 Bal.		Sept. 30 Bal.

Prepare adjusting journal entries for items 1 to 4 above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Date	Account Titles and Explanation	Debit	Credit
Sept. 30
	(To record accrued interest)
Sept. 30
	(To record accrued salaries)
Sept. 30
	(To record accrued interest)
Sept. 30
	(To record depreciation)

Answer 1

T-Accounts:

Salaries Expense
Sept. 30 Bal.	$155,000
Interest Expense
Sept. 30 Bal.	$3,400
Accumulated Depreciation
		Sept. 30 Bal.	$4,650

Adjusting Entries:

Date	Account Titles and Explanation	Debit	Credit
Sept. 30	Interest expense [$4,800 x 3.5% x (6/12)]	$84
	Interest payable		$84
	[To record accrued interest]
Sept. 30	Salaries expense	$2,300
	Salaries payable		$2,300
	[To record accrued salaries]
Sept. 30	Interest expense [$81,600 x 5% x (2/12)]	$680
	Interest payable		$680
	[To record accrued interest]
Sept. 30	Depreciation expense	$4,650
	Accumulated depreciation		$4,650
	[To record depreciation Expense]