Question

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William Bryant is the new owner of Ace Computer Services. At the end of August 2022, his first

month of ownership, Bryant is trying to prepare monthly financial statements. Below is

information related to unrecorded expenses that the business incurred during August.

1. At August 31, Bryant owed his employees $2,900 in salaries and wages that will be paid

on September 1.

2. At the end of the month, he had not yet received the month’s utility bill. Based on past

experience, he estimated the bill would be approximately $600.

3. On August 1, Bryant borrowed $60,000 from a local bank on a 15-year mortgage. The

annual interest rate is 8%.

4. A telephone bill in the amount of $117 covering August charges is unpaid at August 31

(use Telephone and Internet Expense account).

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Required:

Prepare the adjusting journal entries as of August 31, 2022, suggested by the information provided.

Answer 1

No	Date	General Journal	Debit	Credit
1	August 31	Salaries and wages expense	$2,900
		Salaries and wages payable		$2,900
		( To record salaries and wages expense)
2	August 31	Utilities expense	$600
		Utilities payable		$600
		( To record utilities expense)
3	August 31	Interest expense	$400
		Interest payable		$400
		( To record interest expense)
4	August 31	Telephone and internet expense	$117
		Accounts payable		$117
		( To record telephone and internet expense)

3.

Interest payable on August 31 = Note payable x Interest rate x 1/12

= 60,000 x 8% x 1/12

= $400

Kindly comment if you need further assistance. Thanks‼!