Reference no: EM132886324

Problem - Chen Wholesalers Ltd. incurred the following transactions related to current liabilities.

1. Chen's cash register showed the following totals at the end of the day on March 17: pre-tax sales $50,000, GST $2,500, and PST $3,500.

2. Chen received its property tax bill for the calendar year for $52,800 on May 1. payable July 1.

3. Chen's gross payroll for the week of August 15 was $81,000. The company deducted $4,010 for CPP, $1,523 for EI. $6,400 for pension, and $16,020 for income tax from the employees pay. The employer portions of CPP and EI for the week were $4,010 and $2,132, respectively.

4. On August 22, all amounts owing for employee income taxes, CPP, and El pertaining to the payroll in transaction 3 above were paid.

5. On October 1, Chen borrowed $100,000 from First Bank for a six-month period; 4% interest on the bank loan is payable on April 1.

Required -

(a) Record journal entries for the transactions above.

(b) Assuming that Chen's year end is December 31 and that it makes adjusting entries annually, prepare any adjusting entries required for the property tax in transaction 2 and the interest in transaction 5.

(c) Record the journal entry for the settlement of the bank loan in transaction 5 on April 1.