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Ryan Patillo is the new owner of Achievement Computer Services. At the end of August 2015, his first month of ownership, Mr. Patillo is trying to prepare monthly financial statements. Information follows for transactions that occurred in August:
1. At August 31, Mr. Patillo owed his employees $6,000 in wages that would be paid on September 1.
2. At August 31, he had not yet received the month’s utility bill. Based on experience, he estimated the bill would be $900.
3. On August 1, Mr. Patillo invested $60,000 of the company’s funds with a local bank in a 180-day investment certificate. The annual interest rate Is 5%.
4. Rent of $1,200 for September was paid August 31 and charged to rent expense.
Use the information to prepare the adjusting journal entries required on August 31. NOTES:
Date Description Debit Credit
31.8.2014 Salaries and Wages Expense 6.000 Wages earned by employees in one month, but payable to
Salaries and Wages Payable 6.000 them in a following month have to be accrued and expensed
To accrue wages for August in the month the services were received from the employee.
This is the matching principle....