Extracted text: 3 of 4 (c) Examine the above Unadjusted- and Adjusted Trial Balances. Calculate and describe all Journal Entries that would underlie the 2020 Adjusting Entries that relate to the following two transactions: 31 Dec 2020, ABC Puzzle company has not yet paid salaries for Dec 2020 in the amount of €15,000 01 Aug 2020, the ABC company has issued a promissory note (part of notes payable) for €15,000 with an annual interest rate of 10% (maturity date: 01 February 2021).
Extracted text: 2 of 4 Question 1 The ABC Puzzle company is a merchandising company that buys and sells puzzles. The company's end of 2020 Unadjusted- and Adjusted Trial Balances are as shown below. You have recently joined the ABC Puzzle's accounting department. Your supervisor asks you to take a closer look at the prepared Trial Balances before they are presented to the CFO. 1 31 Dec 2020 Unadjusted Trial Balance Adjusting Entries Adjusted Trial Balance Accounts Debit Credit Debit Credit Debit Credit Cash € 120,000 € 120,000 Accounts Receivable 100,000 100,000 Notes Receivable 15,000 15,000 Interest Receivable € 1,500 1,500 Merchandise Inventory 130,000 130,000 Prepaid Insurance 2,000 € 1,000 1,000 Land 70,000 70,000 Buildings & Equipment Accumulated Depreciation 350,000 350,000 € 115,000 45,000 € 160,000 Accounts Payable Notes payable Salaries Payable Interest Payable Dividends Payable Bond payables 180,000 180,000 25,000 25,000 15,000 15,000 1,200 1,200 20,000 20,000 100,000 100,000 Common stock (=Ordinary Share Capital) Additional Paid-in Capital (=Share Premium) Retained Earnings 180,000 180,000 30,000 30,000 40,000 40,000 Sales Revenue 600,000 600,000 Interest Revenue 1,500 1,500 Rent Revenue 10,000 10,000 Cost of Goods Sold 408,000 408,000 Advertising Expense Salaries Expense 20,000 20,000 80,000 15,000 95,000 Interest Expense 5,000 1,200 6,200 Insurance Expense 1,000 1,000 Depreciation Expense 45,000 45,000 Totals 1,300,000 1,300,000 63,700 63,700 1,362,700 1,362,700