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Current Liabilities Cheat Sheet

The document discusses several current liabilities accounts including notes payable, sales taxes payable, unearned revenues, salaries and wages payable, contingent liabilities, and their related journal entries. It provides the journal entries to record issuance of notes payable, accrue interest on notes payable, payment of notes payable and interest, calculate and record sales taxes payable, record advance payment and related revenue, and record estimated warranty liability and fulfilled warranty contracts.

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Sarah Safira
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36 views

Current Liabilities Cheat Sheet

The document discusses several current liabilities accounts including notes payable, sales taxes payable, unearned revenues, salaries and wages payable, contingent liabilities, and their related journal entries. It provides the journal entries to record issuance of notes payable, accrue interest on notes payable, payment of notes payable and interest, calculate and record sales taxes payable, record advance payment and related revenue, and record estimated warranty liability and fulfilled warranty contracts.

Uploaded by

Sarah Safira
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Current Liabilities

Notes Payable
(To record issuance of notes payable)
Journal: Cash
Notes payable
(To accrue interest of notes payable)
Journal: Interest expense
Interest payable
Formula: Face Value of Annual Interest Time in Terms of
× × = Interest
Note Rate One Year
(To record payment of notes payable and accrued interest)
Journal: Notes payable
Interest payable
Cash

Sales Taxes Payable


If sales taxes written separately If sales taxes written together
Journal: Cash Step 1: Calculate sales revenue
Sales Tax 𝐴𝑚𝑜𝑢𝑛𝑡 𝑟𝑒𝑐𝑒𝑖𝑣𝑒𝑑
Payable ൘(100% + 𝑇𝑎𝑥 𝑝𝑟𝑒𝑐𝑒𝑛𝑡𝑎𝑔𝑒)
Sales Revenue Step 2: Calculate sales taxes payable⬚
𝑇𝑎𝑥 𝑝𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 × 𝑆𝑎𝑙𝑒𝑠 𝑟𝑒𝑣𝑒𝑛𝑢𝑒

Unearned Revenues Salaries and Wages Payable (Payroll)


(To record advance payment) Journal : Salaries and wages expense
Journal: Cash Income tax payable
Unearned revenue Salaries and wages payable
(To record revenue)
Journal: Unearned revenue
Sales revenue

Contingent Liabilities
(To record estimated warranty liability)
Journal: Warranty expense
Warranty liability
(To record honored warranty contract)
Journal: Warrant Liability
Repair parts

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