CP$10-3$ Recording and Reporting Current Liabilities

Riverside Company completed the following two transactions. The annual accounting period ends

December $31.$

a$.$ On December $31,$ calculated the payroll, which indicates gross earnings for wages $),$

payroll deductions for income tax $($ $$13,000),$ payroll deductions for FICA $($$$10,000),$ payroll

deductions for United Way $($$$2,000),$ employer contributions for FICA $($matching$),$ and state

and federal unemployment taxes $).$ Employees were paid in cash, but these payments

and the corresponding payroll deductions and employer taxes have not yet been recorded.

b$.$ Collected rent revenue of $$3,600$ on December $10$ for office space that Riverside rented to

another business. The rent collected was for $30$ days from December $11$ to January $10$ and was

credited in full to Deferred Revenue.

Required:

Give the journal entries to record payroll on December $31.$

Give $($a$)$ the journal entry for the collection of rent on December $10$ and $($b$)$ the adjusting

journal entry on December $31.$

TIP: For $($b$),$ notice that the entry recorded on December $10$ includes $10$ days of rental space

$($out of $30)$ that isn't provided until after December $31.$

Show how any liabilities related to these items should be reported on the company's balance

sheet at December $31.$