Thornwood Tile had the following items that require adjusting entries at the end of the year.

a.	Thornwood pays payroll of $180,000 every other Friday for a 2-week period. This year the last payday is Friday, December 26. (Note: The work week is Monday through Friday.)
b.	Thornwood purchased $350,000 of tile on June 1 with a note payable requiring 12% interest. The interest and principal on this note are due within 1 year. As of December 31, Thornwood had not made any principal or interest payments.
c.	Thornwoods earned income is $900,000 for the year for tax purposes. Its effective tax rate is 30%. These taxes must be paid by April 15 of next year.

Required:

Prepare the adjusting journal entries to record these transactions at the end of the current year.

CHART OF ACCOUNTS

Thornwood Tile

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

	REVENUE
411	Sales Revenue
412	Service Revenue
413	Interest Income
414	Rent Revenue

	EXPENSES
511	Cost of Goods Sold
512	Advertising Expense
513	Supplies Expense
514	Utilities Expense
515	Insurance Expense
516	Repairs and Maintenance Expense
517	Bad Debt Expense
518	Rent Expense
519	Warranty Expense
521	Wages Expense
523	Commissions Expense
524	Social Security Taxes Expense
525	Medicare Taxes Expense
526	Federal Unemployment Taxes Expense
527	State Unemployment Taxes Expense
531	Interest Expense
541	Amortization Expense
542	Depreciation Expense
551	Income Taxes Expense
552	Property Taxes Expense