[King_loui88]

Hey guys,
I'm working on an accounting practice set and I have to do some end-of-month adjustments and I'm not sure about the journal entries at the end...
Hereafter I've listed some transactions and also the way I did it. Hopefully u can help me and tell me if there are some mistakes.
Thanks a lot!

Jan 31: Accrue gross wages and salaries of $2760 for January
Debit Credit
Wages & Salaries expense 2790
Wages & Salaries Payable 2790

Jan 31: Transfer $435 of the prepaid insurance to the expense account

Insurance expense 435
prepaid insurance 435

Jan 31: Record the amount of suoerannuation payable for the month - $620

Superannuation expense 620
Superannauation payable 620

Jan 31: Record depreciation expense for the month: Store Equipment (SE) - $221 and Motor Vehicle (MV) $440

Depreciation expense SE 221
Accum. Depr. SE 221
Accum. Depr. SE 221
SE at cost 221

Depreciation expense MV 440
Accum. Depr. MV 440
Accum. Depr. MV 440
MV at cost 440

Jan 31: Interests charged on the bank loan for the month was $79.25 (GST free)

Interest expense 79.25
Bank loan liabilities 79.25

Jan 31: Reduce company tax expense fromm $411 to $189 for the year to date

Company tax payable 222
company tax expense 222

[King_loui88]

Oh, the format isn't the best... therefor Ive chagned the style of the questions!


Jan 31: Accrue gross wages and salaries of $2760 for January
Debit Credit

DEBIT Wages & Salaries expense 2790
CREDIT Wages & Salaries Payable 2790

Jan 31: Transfer $435 of the prepaid insurance to the expense account


DEBIT Insurance expense 435
CREDIT prepaid insurance 435

Jan 31: Record the amount of suoerannuation payable for the month - $620


DEBIT Superannuation expense 620
CREDIT Superannauation payable 620

Jan 31: Record depreciation expense for the month: Store Equipment (SE) - $221 and Motor Vehicle (MV) $440


DEBITDepreciation expense SE 221
CREDIT Accum. Depr. SE 221

DEBIT Accum. Depr. SE 221
CREDIT SE at cost 221


DEBIT Depreciation expense MV 440
CREDIT Accum. Depr. MV 440

DEBIT Accum. Depr. MV 440
CREDIT MV at cost 440

Jan 31: Interests charged on the bank loan for the month was $79.25 (GST free)


DEBITInterest expense 79.25
CREDIT Bank loan liabilities 79.25

Jan 31: Reduce company tax expense fromm $411 to $189 for the year to date

DEBITCompany tax payable 222
CREDIT company tax expense 222


Hopefully it is better this way!

[Just Looking]

I know it is hard to show debits and credits in here. One option is to show it like this:

Wages & Salaries expense 2790 dr
Wages & Salaries Payable 2790 cr


I agree with most of your entries. Can you tell me though what you are doing with the depreciation entry? Without seeing the dr and cr it's not clear. Normally your entries would be:


Debit Depreciation expense SE 221 dr
Credit Accum. Depr. SE 221 cr

Debit Depreciation expense MV 440
Credit Accum. Depr. MV 440



The other comment I would make is that the interest should be a credit to Interest Payable, not the bank loan liability.

I also am guessing you are from Australia. I'm in the U.S. so there may be some slight differences.

PS - Just noticed that wages has numbers of $2760 and $2790 - probably a typo?

[King_loui88]

Thanks for your fast answer!

For the depriciation I did it the same way as you...

First entry:

Depreciation expense SE 221 dr
Accum. Depr. SE 221 cr

And after that I made a second one to entry the depriciation loss of the asset:

Accum. Depr. SE 221 dr
SE at cost 221 cr

Is it right to do this step?

For the interest entry I agree with you but I'm using a computerised accounting practice set with predefined liabilities accounts and I really don't know which other account I could use...

The other liability accounts are:

- Visa
- Accounts Payable
- A/P Accrual -Inventory
- GST Collected
- GST Paid
- WET Payable
- Import duty payable
- Voluntary Withholdings payable
- ABN Withholdings payable
- Luxury Car Payable
- Payroll accruals payable
- PAYG Withholding payable
- superannuation payable
- Wages & Salaries Payable
- Company Tax Payable
- Customer Deposits
- Other current liabilities
- Bank loans
- other long term liabilities

Can I put it to the accounts payable? Not really or?



And, yes you guessing right, I'm from Australia...

PS: ist just a typo, but thanks anyway!

[Just Looking]

You are just recording depreciation for the month so you only need these:

Debit Depreciation expense SE 221 dr
Credit Accum. Depr. SE 221 cr

Debit Depreciation expense MV 440
Credit Accum. Depr. MV 440


The only time you'd debit the accumulated depn and credit the asset is if you sold or disposed of the asset, and then it would be the full amount not just the monthly amount. You don't have to do anything to the cost of the asset for your monthly entries as the book value of the asset is shown as cost less accumulated depreciation on your Balance Sheet.

The only possibility I see in those accounts is Other Current Liabilities. Personally, I like that better than bank loans as that account should be for the face amount of the loan.

I only guessed Australia because of the word superannuation. I had to look it up as I wasn't familiar with it. I've never been to Australia... yet. My husband and I want to visit there in the next few years. We are both divers and would love to do some diving there. :)