In: Accounting
ABC Company had the following transactions during 2019:
May 1: Received $6000 cash in advance for services to be provided over the coming 10 months.
August 5: Sold Merchandise for $7560 including 8% sales tax.
September 1: Borrowed $20000 from FNB bank by issuing 6 months, 6% interest bearing note.
October 10: Sold merchandise on account for $6000 plus 10% sales tax.
December 31: Prepare the adjusting entry to record the service revenue earned.
December 31: Prepare the adjusting entry to record the accrued interest to FNB bank.
December 31: Remitted the sales taxes to the government.
Answer the below questions related to the above transactions
7) The earned amount of the service revenue on December 31 is" *
a) $3,500
b) $4,800
c) $4,500
d) $5,000
8) The remaining balance of the Unearned Service Revenue after December 31 is: *
a) Zero
b) 1,200
c) $3,000
d) $4,000
9) The accrued interest amount on December 31 on the borrowed amount from FNB Bank is: *
a) $300
b) $400
c) $500
d) None of the above
10) The amount of Taxes Payable remitted to the government on December 31 is: *
a) $560
b) $1,160
c) $1,720
d) $1,820