Question

# a. On April 1, the company retained an attorney for a flat monthly fee of \$1,500....

 a. On April 1, the company retained an attorney for a flat monthly fee of \$1,500. Payment for April legal services was made by the company on May 12. b. A \$560,000 note payable requires 8.0% annual interest, or \$3,733 to be paid at the 20th day of each month. The interest was last paid on April 20 and the next payment is due on May 20. As of April 30, \$1,244 of interest expense has accrued. c. Total weekly salaries expense for all employees is \$13,000. This amount is paid at the end of the day on Friday of each five-day workweek. April 30 falls on Tuesday of this year, which means that the employees had worked two days since the last payday. The next payday is May 3.

 The above three separate situations require adjusting journal entries to prepare financial statements as of April 30. For each situation, present both the April 30 adjusting entry and the subsequent entry during May to record the payment of the accrued expenses. (Use 360 days a year. Do not round intermediate calculations.)

#### Homework Answers

Answer #1

1.

 Apr-30 Legal services fee \$ 1,500 Accounts payable \$ 1,500 (To record accrual of legal fee) May-12 Accounts payable \$ 1,500 Cash \$ 1,500 (To record payment of legal fee)

2.

 Apr-30 Interest expenses \$ 1,244 Interest payable \$ 1,244 (To record interest expenses) May-20 Interest expenses (\$3,733-\$1,244) \$ 2,489 Interest payable \$ 1,244 Cash \$ 3,733 (To record payment of interest )

3.

 Apr-30 Salaries and wages expenses (\$13,000/5*2) \$ 5,200 Salaries and wages payable \$    5,200 (To record salaries due) May-03 Salaries and wages payable \$ 5,200 Salaries and wages expenses (\$13,000/5*3) \$ 7,800 Cash \$ 13,000 (To record payment of salaries and wages)
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