Question: Journalizing and posting liabilities The general ledger of U-R-Shipping at June 30, 2016, the end of the company's fiscal year, includes the following account balances before payroll and adjusting entries.
The additional data needed to develop the payroll and adjusting entries at June 30 are as follows:
a. The long-term debt is payable in annual installments of $36,000, with the next installment du July 31. On that date, U-R-Shipping will also pay one year's interest at 8%. Interest was on July 31 of the preceding year. Make the adjusting entry to accrue interest expense at year-end.
b. Gross unpaid salaries for the last payroll of the fiscal year were $4,600. Assume that employ income taxes withheld are $980 and that all earnings are subject to OASDI.
c. Record the associated employer taxes payable for the last payroll of the fiscal year, $4,600. Assume that the earnings are not subject to unemployment.
d. On February 1, the company collected one year's rent of $5,400 in advance.
Requirements: 1. Using the T-accounts opened for you, insert the unadjusted June 30 balances.
2. Journalize and post the June 30 payroll and adjusting entries to the accounts. Identify each adjusting entry by letter.
3. Prepare the current liabilities section of the balance sheet at June 30, 2016.