At December 31 of the previous year, Birch had equipment that cost $30,000, had accumulated depreciation of $6,000, and zero residual value.

Birch uses diminishing (declining) balance depreciation at a rate of 30% per year. May 1 of the current year, Birch sold the equipment for $20,000. Prepare the journal entries for Birch on May 1 to update depreciation for four months and to record sale of the equipment.

Date Debit account Credit account Debit $ Credit

b) Birch's trial balance showed salaries payable of $2,000. Birch then paid $3,500 that included both the amount owing and current salaries.

Date	Debit account	Credit account	Debits	Credit $
b

c) Birch's unadjusted trial balance shows $5,000 in Deferred (Unearned)

Service Revenue. An adjustment is needed for the fact that $4,200 of this amount is still not earned.

Date	Debit account	Credit account	Debit $	Credit $
c)

d) Birch paid $1,400 that was owing to suppliers for previous purchases of supplies inventory, on credit.

Date	Debit account	Credit account	Debit $	Credit s T

e) The bank loan payable of $10,000 was acquired one month before year end and is payable five months after year end. The loan has an annual interest rate of 8%. An entry is needed for interest owing at year end.