Question

Oriole Company is the new owner of Oriole’s Computer Services. At the end of July 2017, her first month of ownership, Oriole is trying to prepare monthly financial statements. She has the following information for the month.

1.		At July 31, Oriole owed employees $1,940 in salaries that the company will pay in August.
2.		On July 1, Oriole borrowed $21,000 from a local bank on a 12-year note. The annual interest rate is 8%.
3.		Service revenue unrecorded in July totaled $1,600.

Prepare the adjusting entries needed at July 31, 2017. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
1.
2.
3.

Answer 1

Number	Account Titles and Explanation	Debit	Credit
1	Salary Expense A/c	1,940
	Salary Payable A/c		1,940
	(Adjusting entry for salary)
2	Interest Expense A/c	140
	Interest Payable A/c		140
	(Payable adjusting entry)
3	Cash A/c	1,600
	Accrued Revenue A/c		1,600
	(Unrecorded revenue)

Interst expense found by 21000 x 8% x 1/12

Payable account is current liability

in the entry of accrued revenue debit may become account recievable/. Here i considered cash received before billing