The bookkeeper for Sunland Company asks you to prepare the following accrual adjusting entries at December 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) (a) Interest on notes payable of $370 is accrued. (b) Services performed but unbilled totals $1,830. (c) Salaries of $900 earned by employees have not been recorded.

a) Debit interest expense $370

  Credit note payable account $370.

b) Debit Unbilled receivables $1,830

   Credit Service revenue       $1,830

c) Debit Salaries expense     $900

   Credit Accrued Salaries     $900

Explanation:

For interest on notes payables to be accrued, the entries required would be debit interest expense $370 and credit note payable account $370.

For services that have been rendered but yet to be billed, revenue must be recognized as the condition for its recognition has been satisfied hence the entries required are debit unbilled receivables and credit revenue.

When an expense is incurred but yet to be settled in accrual accounting, the expense has to be recognized in the period in which it is incurred by debiting the expense account and crediting the accrued expense ( a liability) account with the amount incurred.

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