-ctives 1, 2
P11-25A Journalizing and posting liabilities
enue $3,000
The general ledger of Seal-N-Ship at June 30, 2018, the end of the company's fiscal
year, includes the following account balances before payroll and adjusting entrics.
Accounts Payable
$ 114,000
Interest Payable
0
Salaries Payable
0
Employee Income Taxes Payable
0
FICA-OASDI Taxes Payable
0
FICA-Medicare Taxes Payable
0
Federal Unemployment Taxes Payable
0
State Unemployment Taxes Payable
0
Unearned Rent Revenue
7,200
Long-term Notes Payable
210,000
The additional data needed to develop the payroll and adjusting entries at June 30 are
as follows:
a. The long-term debt is payable in annual installments of $42,000, with the next
installment due on July 31. On that date, Seal-N-Ship will also pay one year's inter-
est at 9%. Interest was paid on July 31 of the preceding year. Make the adjusting
entry to accrue interest expense at year-end.
b. Gross unpaid salaries for the last payroll of the fiscal year were $4,700. Assume
that employee income taxes withheld are $910 and that all earnings are subject to
OASDI.
c. Record the associated employer taxes payable for the last payroll of the fiscal year,
$4,700. Assume that the earnings are not subject to unemployment compensation
taxes
d. On February 1, the company collected one year's rent of $7,200 in advance.
Requirements
1. Using T-accounts, open the listed accounts and insert the unadjusted June 30
balances.
2. Journalize and post the June 30 payroll and adjusting entries to the accounts that
you opened. Identify each adjusting entry by letter. Round to the nearest dollar.
3. Prepare the current liabilities section of the balance sheet at June 30, 2018.
Current
