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Accounting The Lease On The Building Is Essay

Accounting The lease on the building is for two years, so it is highly unlikely that this is a finance lease. It does not appear that the Large Mart is going to take ownership of the building. Thus, since this is not a finance lease, the journal entry would simply record the rent. There is no opening entry, just an expense.

621 Rent Expense

101 Cash at bank

The wages show as a journal entry at the end of the month. Because the employees were not paid, the wage expense shows as the creation of a liability. The liability account is later offset when the two are paid.

624 Wage Expense

204 Wages Payable

204 Wages Payable

101 Cash at Bank

Well the first to do is have a chat with the audit department about that $12,000 trip to China. It does not cost that much, unless he's buying some luxury...

But as far as the journal entries, the key is deciding how to classify this bed. An oversized $40,000 bed is not inventory; it is part of the store fixtures. The closest thing is machinery/equipment, since that category is fairly vague. Given the categories provided, the China trip is a salary expense. But that is only because there is no category for marketing or administrative expenses. Not sure why there wouldn't be a category for that.
164 Machinery/Equipment

40000

202 Accounts Payable

40000

624 Wage Expense

12000

202 Accounts Payable

12000

4. The inventory order is not recorded until the inventory is received -- you need to have that certainty about delivery before you record it because without delivery there…

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