The Northwood Inn general ledger at September 30, 2008, the end of the company's fiscal year, includes the following account balances before adjusting entries.

The additional data needed to develop the adjusting entries at September 30 are as follows:

a. The long-term note payable is payable in annual installments of \(\$ 50,000\), with the next installment due on January 31,2009 . On that date, Northwood will also pay one year's interest at \(6 \%\). Interest was last paid on January 31. Make the adjusting entry to shift the current installment of the note payable to a current liability. Also accrue interest expense at year end.

b. Gross salaries for the last payroll of the fiscal year were \(\$ 4,300\). Of this amount, employee payroll taxes payable were \(\$ 950\). 

c. Employer payroll taxes payable were \(\$ 890\). 

d. On August 1, the company collected six months' rent of \(\$ 3,900\) in advance.

Requirements 

1. Using four-column format, open the listed accounts, inserting their unadjusted September 30 balances.

2. Journalize and post the September 30 adjusting entries to the accounts that you opened. Key adjusting entries by letter.

3. Prepare the liabilities section of Northwood Inn's balance sheet at September 30, 2008. Show total current liabilities and total liabilities. 

Transcribed Image Text:

Accounts Payable...... Current Portion of Note Payable Interest Payable............. Salary Payable...... Employee Payroll Taxes Payable.. Employer Payroll Taxes Payable..... Unearned Rent Revenue. Long-Term Note Payable........ $ 36,210 3,900 100,000