Response to the following problem:
The general ledger of Red Brick Investments at June 30, 20X8, the end of the company's fiscal year, includes the following account balances before adjusting entries.
Accounts Payable...................................................... $105,520
Current Portion of Long-Term Debt............................
Interest Payable.......................................................
Salary Payable .........................................................
Employee Payroll Taxes Payable..................................
Employer Payroll Taxes Payable..................................
Unearned Rent Revenue ........................................... 6,000
Long-Term Debt...................................................... 200,000
The additional data needed to develop the adjusting entries at June 30 are as follows:
a. The long-term debt is payable in annual installments of $40,000 with the next installment due on July 31. On that date, Red Brick will also pay one year's interest at 9%. Interest was last paid on July 31 of the preceding year. (Make the adjusting entry to shift the current installment of the long-term debt to a current liability.)
b. Gross salaries for the last payroll of the fiscal year were $5,044. Of this amount, employee payroll taxes payable were $1,088, and salary payable was $3,956.
c. Employer payroll taxes payable were $876.
d. On February 1, the company collected one year's rent of $6,000 in advance.
Required:
1. Open the listed accounts, inserting the unadjusted June 30 balances.
2. Journalize and post the June 30 adjusting entries to the accounts opened. Key adjusting entries by letter.
3. Prepare the liability section of the balance sheet at June 30, 20X8. Show total current liabilities and total liabilities.