For each separate case below, follow the 3-step process for adjusting the accrued expense account: Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record an adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year.
a. Salaries Payable. At year-end, salaries expense of $15,500 has been incurred by the company, but is not yet paid to employees.
b. Interest Payable. At its December 31 year-end, the company owes $250 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year.
c. Interest Payable. At its December 31 year-end, the company holds a mortgage payable that has incurred $875 in annual interest that is neither recorded nor paid. The company intends to pay the interest on January 7 of the next year.