ACCRUED LIABILITIES Charger Electronics had the following items that require adjusting entries at the end of the year.

. Charger pays its employees $2,500 every Friday. This year December 31 falls on a Thursday.

. Charger earned income of $150,000 for the year for tax purposes. Its effective tax rate is 30 percent. These taxes must be paid by April 15 of next year.

. Charger borrowed $50,000 with a note payable dated October 1.

This note specifies 8 percent. The interest and principal are due on March 31 of the following year.

. Charger’s president earns a bonus equal to 10 percent of income in excess of

$100,000. Income for the year was $150,000. This bonus is paid in May of the following year and any expense is charged to wages expense.

Required:

Prepare the adjusting journal entries to record these transactions at the end of the current year.

Exercise