1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 9-3 Accrued Expenses Accrued interest expense. Recording payment of note at maturity Accrued salary expense. Accrued employer payroll taxes expense. Accrued federal income tax expense. Adjusting, closing, and reversing entries to accrued expenses

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Competency: Accounting Adjustments and Valuation/Accrued Accounting for Notes Payable, Prepaid Expenses, Expenses Objectives 49. Perform all notes payable and notes receivable activities. 50. Analyze all accounts payable and accounts receivable activities. 52. Record accrued expenses. 2 LESSON 9-3

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 9-3 Principal Interest Rate Time as Fraction of Year Interest for 15 Days  = 1.Determine the amount of accrued interest. 2.Debit the expense account. 3.Credit the liability account. JOURNALIZING ACCRUED INTEREST EXPENSE page 272 1 2 3 $7,500.00  10%  = $31.25 15 360

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 9-3 1.Debit the liability account. 2.Credit the expense account. REVERSING ENTRY FOR ACCRUED INTEREST page 273 1 2

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 9-3 Notes Payable 2/137,500.001/1 Bal.7,500.00 Interest Expense 2/13125.001/1 Bal.31.25 Principal Interest Rate Time as Fraction of Year Total Interest Due  = 1.Calculate total interest due at maturity. 2.Debit Notes Payable, $7,500.00. 3.Debit Interest Expense, $125.00. (Credit Cash, $7,625.00.) 4.Determine the interest expense for the current period. PAYMENT OF NOTE AT MATURITY page 273 1 2 3 $7,500.00  10%  = $125.00 60 360 Interest Expense Recorded in Previous Period Total Interest Expense for the Note Interest Expense Recorded in Current Period – = $125.00– = $93.75 $31.254

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 9-3 1.Debit the expense accounts. 2.Credit the liability accounts. JOURNALIZING ACCRUED SALARY EXPENSE page 274 1 2

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 9-3 1.Debit the liability accounts. 2.Credit the expense accounts. REVERSING ENTRY FOR ACCRUED SALARY page 275 1 2

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 9-3 1.Debit the expense account. 2.Credit the liability accounts. JOURNALIZING ACCRUED EMPLOYER PAYROLL TAXES EXPENSE page 276 1 2

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 9-3 1.Debit the liability accounts. 2.Credit the expense account. REVERSING ENTRY FOR ACCRUED EMPLOYER PAYROLL TAXES page 276 1 2

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 9-3 1.Debit the expense account. 2.Credit the liability account. JOURNALIZING ACCRUED FEDERAL INCOME TAX EXPENSE page 277 1 2

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 9-3 TERM REVIEW accrued expenses page 279