Charger Inc had the following items that require adjusting entries at the end of the year a Charger pays its employees $3,000 every Friday for a 5 day work week This year December 31 falls on a Wednesday b Charger earned income of $850,000 for the year for tax purposes Its effective tax rate is 30 These taxes must be paid by April 15 of next year c Charger borrowed $400,000 with a note payable dated August 1 This note specifies 6 The interest and principal are due on March 31 of the following year d Chargers president earns a bonus equal to 10 of income in excess of $690,000 Income for the year was $850,000 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 CHART OF ACCOUNTS Charger Inc General Ledger ASSETS 111 Cash 112 Petty Cash 121 Accounts Receivable 123 Allowance for Doubtful Accounts 124 Notes Receivable 125 Supplies 126 Prepaid Insurance 127 Prepaid Rent 128 Inventory 129 Interest Receivable 130 Investment 131 Land 132 Buildings 133 Equipment 134 Furniture 135 Trucks 139 Accumulated Depreciation LIABILITIES 211 Accounts Payable 212 Utilities Payable 213 Insurance Payable 214 Interest Payable 215 Warranty Liability 216 Income Taxes Payable 221 Excise Taxes Payable (Federal) 222 Excise Taxes Payable (State) 223 Property Taxes Payable 224 Sales Taxes Payable (State) 231 Wages Payable 233 Commissions Payable 234 Federal Income Taxes Withholding Payable 235 State Income Taxes Withholding Payable 236 Social Security Taxes Payable 237 Medicare Taxes Payable 238 Charitable Contributions Payable 239 Union Dues Payable 241 Federal Unemployment Taxes Payable 242 State Unemployment Taxes Payable 251 Unearned Sales Revenue 252 Unearned Rent Revenue 261 Bonds Payable 262 Notes Payable EQUITY 311 Common Stock 321 Retained Earnings 331 Dividends

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Posted on Oct 01, 2024

Charger Inc. had the following items that require adjusting entries at the end of the year.

a.	Charger pays its employees $3,000 every Friday for a 5-day work week. This year December 31 falls on a Wednesday.
b.	Charger earned income of $850,000 for the year for tax purposes. Its effective tax rate is 30%. These taxes must be paid by April 15 of next year.
c.	Charger borrowed $400,000 with a note payable dated August 1. This note specifies 6%. The interest and principal are due on March 31 of the following year.
d.	Chargers president earns a bonus equal to 10% of income in excess of $690,000. Income for the year was $850,000. 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.

CHART OF ACCOUNTS

Charger Inc.

General Ledger

	ASSETS
111	Cash
112	Petty Cash
121	Accounts Receivable
123	Allowance for Doubtful Accounts
124	Notes Receivable
125	Supplies
126	Prepaid Insurance
127	Prepaid Rent
128	Inventory
129	Interest Receivable
130	Investment
131	Land
132	Buildings
133	Equipment
134	Furniture
135	Trucks
139	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
212	Utilities Payable
213	Insurance Payable
214	Interest Payable
215	Warranty Liability
216	Income Taxes Payable
221	Excise Taxes Payable (Federal)
222	Excise Taxes Payable (State)
223	Property Taxes Payable
224	Sales Taxes Payable (State)
231	Wages Payable
233	Commissions Payable
234	Federal Income Taxes Withholding Payable
235	State Income Taxes Withholding Payable
236	Social Security Taxes Payable
237	Medicare Taxes Payable
238	Charitable Contributions Payable
239	Union Dues Payable
241	Federal Unemployment Taxes Payable
242	State Unemployment Taxes Payable
251	Unearned Sales Revenue
252	Unearned Rent Revenue
261	Bonds Payable
262	Notes Payable