Scenario 2 Use General Journal to record the following adjustment. Show your working in the answer...

Scenario 2

Use General Journal to record the following adjustment. Show your working in the answer if necessary.

Transaction 1: Wages for APC Pty Ltd total $10,000 per week, i.e. $2,000 per day for a Monday to Friday working week, and are paid each Friday. Wages this year to date are $510,000. Assume that end of the accounting period, 30 June, falls on a Wednesday. Employees have worked three days since having been paid for the previous week.

Date	Accounts	DR	CR
30^th June

Transaction 2: On 1 April 2019, APC Pty Ltd paid premium of $10,000 plus $1,000 GST on fire insurance for 12 months from 1 April 2019. The end of the accounting period is 30 June 2019.

Date	Accounts	DR	CR
30^th June

Transaction 3: APC Pty Ltd made investment of $100,000 in Telecom Bonds on 1 July 2018. The interest rate is 10% per year. Interest is received every six months on 31 March and 30 September. Balance date is 30 June 2019.

Date	Accounts	DR	CR
30^th June

Transaction 4: On 1 February 2019, APC Pty Ltd received $1,500 in rent, 6 months in advance to cover a tenancy until 31 July 2019. Balance date 30 June 2019.

Date	Accounts	DR	CR
30^th June

Part B Total: 24 Marks

Expert Solution

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APC Pty Ltd
Working for Adjusting Entry	Amount $	Note
Daily Salary	2,000.00	A
Salary till Wednesday ( 3 days)	6,000.00	*B=A3**

Premium paid	10,000.00	C
Insurance Expense ( 3 months)	2,500.00	*D=C/123**

Investment value	100,000.00	E
Interest rate	10%	F
Annual Interest amount	10,000.00	*G=EF**
Monthly Interest	833.33	H=G/12
Interest from Apr to Jun (3 months)	2,500.00	*I=H3**

Total rent received	1,500.00	J
Number of months	6.00	K
Rent for 5 months till June	1,250.00	*L=J/K4**

Adjusting Entries
Date	Account	Debit $	Credit $	Note
30-Jun	Salaries Expense	6,000.00		See Note B
	Salaries Payable		6,000.00

30-Jun	Insurance Expense	2,500.00		See Note D
	Prepaid Insurance		2,500.00

30-Jun	Interest Receivable	2,500.00		See Note I
	Interest Revenue		2,500.00

30-Jun	Unearned Rent Revenue	1,250.00		See Note L
	Rent Revenue		1,250.00

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