Question

Charger, Inc. had the following items that require adjusting entries at the end of the year.
a. Charger pays its employees $5,000 every Friday for a five-day work week. This year December 31 falls on a Wednesday.
b. Charger earned income of $800,000 for the year for tax purposes. Its effective tax rate is 35 percent. These taxes must be paid by April 15 of next year.
c. Charger borrowed $280,000 with a note payable dated August 1. This note specifies 6 percent. The interest and principal are due on March 31 of the following year.
d. Charger’s president earns a bonus equal to 10 percent of income in excess of $650,000.
Income for the year was $800,000. This bonus is paid in May of the following year and any expense is charged to wages expense.

Required:
Prepare the adjusting journal entries to record these transactions at the end of the current year.


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  • CreatedSeptember 22, 2015
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