Question
Charger Inc. had the following items that require adjusting entries at the end of the year. a. Charger pays its employees $5,000 every Friday for
Charger Inc. had the following items that require adjusting entries at the end of the year.
a. Charger pays its employees $5,000 every Friday for a 5-day workweek. This year December 31 falls on a Wednesday.
b. Charger earned income of $870,000 for the year for tax purposes. Its effective tax rate is 40%. These taxes must be paid by April 15 of next year.
c. Charger borrowed $260,000 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 $700,000. Income for the year was $870,000. 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.
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