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Consider the following situations: A business receives $3 800 on 1 January for 10-month service contract for the period 1 January to 31 October.

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Consider the following situations: A business receives $3 800 on 1 January for 10-month service contract for the period 1 January to 31 October. Total salaries for all employees is $3 200 per month. Employees are paid on the 1st and 15th of the month. Work performed but not yet billed to customers for the month is $1 000. The company pays interest on its $15 000, 8% loan payable of $100 on the first day of each month. Requirement Assume that the company records adjusting entries monthly. Journalise the adjusting entries needed as at 31 January.

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