17. The following data were taken from the records of Raysut Cement Factory for the year ended December 31, 2018. Jan2. Purchased merchandise on account from Yokum Co., $60,000 terms 2/10, n/30. Feb1. Issued a 8%, 2 month, $60,000 note in payment of account. Mar31 Accrued interest for 2 months on Yokum note. Apr1 Paid face value and interest on Yokum note. July1 Purchased Furnituret from Korsak Equipment paying $22,000 in cash and signing a 9%, 3 months, $80,000 note. Sept.30 Accrued interest for 2 months on Korsak note. Oct.1 Paid face value and interest on Korsak note. Dec.1 Borrowed $48,000 from the Otagon Bank by issuing a 3 month, 7% interest- bearing note with a face value of $48,000 Dec. 31 Recognized interest expense for 1 month on Otago Bank note. Instructions: Prepare journal entries for the above transactions and events. Show the Balance Sheet presentation of notes and interest payable at December 31.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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