Accrued Liabilities Thornwood Tile had the following items that require adjusting entries at the end...
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Accounting
Accrued Liabilities
Thornwood Tile had the following items that require adjusting entries at the end of the year.
Thornwood pays payroll of $30,400 every other Friday for a two-week period. This year December 31 falls on the Tuesday before payday. (Note: The work week is Monday through Friday.)
Thornwood purchased $100,000 of tile on March 1 with a note payable requiring 12% interest. The interest and principal on this note are due within one year. As of December 31, Thornwood had not made any principal or interest payments.
Thornwood's earned income is $500,000 for the year for tax purposes. Its effective tax rate is 25%. These taxes must be paid by April 15 of next year.
Required:
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Prepare the adjusting journal entries to record these transactions at the end of the current year.
a.
(Record accrued wages)
b.
(Record accrued interest)
c.
(Record accrued income taxes)
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