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In: Accounting

Lyrtricks Ltd., which has a December 31 year end, had the following transactions in December 2020...

Lyrtricks Ltd., which has a December 31 year end, had the following transactions in December 2020 and January 2021:

2020

Dec. 1

 The company borrowed $170,000 from a bank on a five-year loan payable. The terms of the loan stipulate that Lyrtricks must repay 1/5 of the principal every November 30 plus the interest accrued to that date. The loan bears interest at 9% per annum.

Dec. 31

 Recorded employee wages for December. The wages earned by employees amounted to $10,900, and the company withheld CPP of $628, EI of $530, and income taxes of $2,000. Lyrtricks’ employer contributions were $628 for CPP and $742 for EI.

Dec. 31

 Recorded the adjusting entry to record the interest incurred on the bank loan during December.

Dec. 31

 Recorded the entry to reclassify the current portion of the bank loan.
2021

Jan. 2

 Paid the wages recorded on December 31.

Jan. 15

Made the remittance to the government related to the December 31 payroll.

Prepare all necessary journal entries related to the above transactions.

2020...

Dec. 1

Dec. 31-- to record wages payable

Dec. 31 -- to record employer's liabilities

Dec 31. -- to record interest

Dec. 31 -- to record reclassification of current portion of bank loan

2021...

Jan. 2

Jan. 15

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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