The general ledger of Pack- N- Ship at June 30, 2014, the end of the company’s fiscal year, includes the following account balances before adjusting entries.
Accounts Payable ............. $ 111,000
Interest Payable ............. 0
Salaries Payable ............. 0
Employee Payroll Taxes Payable ....... 0
Employer Payroll Taxes Payable ....... 0
Unearned Rent Revenue ........... 6,300
Long- Term Notes Payable .......... 220,000
The additional data needed to develop the adjusting entries at June 30 are as follows:
a. The long-term debt is payable in annual installments of $ 44,000, with the next installment due on July 31. On that date, Pack-N-Ship will also pay one year’s interest at 10%. Interest was paid on July 31 of the preceding year. Make the adjusting entry to accrue interest expense at year- end.
b. Gross unpaid salaries for the last payroll of the fiscal year were $ 4,900. Assume Employee Payroll Taxes Payable are $ 960.
c. Employer payroll taxes owed are $ 810.
d. On February 1, the company collected one year’s rent of $ 6,300 in advance.
1. Using T-accounts, open the listed accounts and insert the unadjusted June 30 balances.
2. Journalize and post the June 30 adjusting entries to the accounts that you opened. Identify each adjusting entry by letter.
3. Prepare the current liabilities section of the balance sheet at June 30, 2014.