E4-8 Recording Transactions Including Adjusting and Closing Entries (Nonquantitative) LO4-1, 4-4 The following accounts are used by Britt's Knits Inc. Codes J Codes A B D E F G Accounts Cash Office supplies Accounts receivable Office equipment Accumulated depreciation Note payable Wages payable Interest payable Deferred service revenue K L M N O P 0 R Accounts Contributed capital Retained earnings Service revenue Interest revenue Wage expense Depreciation expense Interest expense Supplies expense None of the above 1 Required: For each of the following nine independent situations, give the journal entry by selecting the appropriate code(s) from the drop-down menu and enter the amount(s). The first transaction is used as an example. Debit Credit Code Amount Code Amount 1,150 a. N 1,150 Independent Situations Accrued wages, unrecorded and unpaid at year-end, $1,150. b Service revenue earned but not yet collected at year-end, $1,350. c. Dividends declared and paid during the year, $1,650. Office supplies on hand during the year, $1,150; supplies on hand at d. year-end, $310. e. Service revenue collected in advance and not yet earned, $1,550. f. Depreciation expense for the year, $2,500. g. At year-end, interest on note payable not yet recorded or paid, $370. Balance at year-end in Service Revenue account, $71,000. Give the h. closing entry at year-end. Balance at year-end in Interest Expense account, $610. Give the closing i. entry at year-end. E4-10 Determining Financial Statement Effects of Interest on Two Notes LO4-1 Note 1: On April 1, 2017, Warren Corporation received a $48,000, 4 percent note from a customer in settlement of a $48,000 open account receivable. According to the terms, the principal of the note and interest are payable at the end of 12 months. Warren's fiscal year ends on December 31, 2017. Note 2: On August 1, 2017, to meet a cash shortage, Warren Corporation obtained a $48,000, 5 percent loan from a local bank. The principal of the note and interest expense are payable at the end of six months. Required: For the relevant transaction dates of each note, indicate the amounts and direction of effects on the elements of the statement of financial position and the statement of earnings. (Reminder: Assets = Liabilities + Shareholders' equity; Revenues - Expenses = Net earnings; and net earnings accounts are closed to retained earnings, a component of shareholders' equity.) (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) Statement of Earnings Statement of Financial Position Shareholders' Assets Liabilities Equity Date Revenues Expenses Net earnings Note 1: April 1, 2017 December 31, 2017 March 31, 2018 Note 2: August 1, 2017 December 31, 2017 January 31, 2018