century 21 accounting © 2009 south-western, cengage learning lesson 9-3 accrued expenses accrued...
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 9-3LESSON 9-3
Accrued Expenses
Accrued interest expense.Recording payment of note at maturityAccrued salary expense.Accrued employer payroll taxes expense.Accrued federal income tax expense.Adjusting, closing, and reversing entries to accrued expenses
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
Competency: Accounting Adjustments and Competency: Accounting Adjustments and Valuation/Accrued Accounting for Notes Valuation/Accrued Accounting for Notes Payable, Prepaid Expenses, ExpensesPayable, Prepaid Expenses, Expenses
Objectives
49. Perform all notes payable and notes receivable activities.
50. Analyze all accounts payable and accounts receivable activities.
52. Record accrued expenses.
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LESSON 9-3
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
PrincipalInterest Rate
Time as Fraction of Year
Interest for 15 Days
=
1. Determine the amount of accrued interest.
2. Debit the expense account.
3. Credit the liability account.
JOURNALIZING ACCRUED JOURNALIZING ACCRUED INTEREST EXPENSEINTEREST EXPENSE page 272
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$7,500.00 10% = $31.2515
360
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
1. Debit the liability account.
2. Credit the expense account.
REVERSING ENTRY FOR REVERSING ENTRY FOR ACCRUED INTERESTACCRUED INTEREST page 273
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
Notes Payable
2/13 7,500.00 1/1 Bal. 7,500.00
Interest Expense
2/13 125.00 1/1 Bal. 31.25
PrincipalInterest Rate
Time as Fraction of Year
Total Interest Due
=
1. Calculate total interest due at maturity.
2. Debit Notes Payable, $7,500.00.
3. Debit Interest Expense, $125.00. (Credit Cash, $7,625.00.)
4. Determine the interest expense for the current period.
PAYMENT OF NOTE AT MATURITYPAYMENT OF NOTE AT MATURITY page 273
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$7,500.00 10% = $125.0060360
Interest Expense Recorded in
Previous Period
Total Interest Expense for the
Note
Interest Expense Recorded in
Current Period– =
$125.00 – = $93.75$31.25 44
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
1. Debit the expense accounts.
2. Credit the liability accounts.
JOURNALIZING ACCRUED JOURNALIZING ACCRUED SALARY EXPENSESALARY EXPENSE page 274
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
1. Debit the liability accounts.
2. Credit the expense accounts.
REVERSING ENTRY FOR REVERSING ENTRY FOR ACCRUED SALARYACCRUED SALARY page 275
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
1. Debit the expense account.
2. Credit the liability accounts.
JOURNALIZING ACCRUED EMPLOYER JOURNALIZING ACCRUED EMPLOYER PAYROLL TAXES EXPENSEPAYROLL TAXES EXPENSE page 276
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
1. Debit the liability accounts.
2. Credit the expense account.
REVERSING ENTRY FOR ACCRUED REVERSING ENTRY FOR ACCRUED EMPLOYER PAYROLL TAXESEMPLOYER PAYROLL TAXES page 276
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CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 9-3
1. Debit the expense account.
2. Credit the liability account.
JOURNALIZING ACCRUED FEDERAL JOURNALIZING ACCRUED FEDERAL INCOME TAX EXPENSEINCOME TAX EXPENSE page 277
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