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Jose Contreras is the new owner of Curveball Computer Services. At the end of July 2010, his first month of ownership, Jose is trying to prepare monthly financial statements. He has the following information for the month.
1. At July 31, Contreras owed employees $1,100 in salaries that the company will pay in August.
2. On July 1, Contreras borrowed $20,000 from a local bank on a 10-year note. The annual interest rate is 12%.
3. Service revenue unrecorded in July totaled $1,600.
Prepare the adjusting entries needed at July 31, 2010.
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