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Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month. Salaries and wages earned from December 16 through December 31, 2016, were $1,500.
On October 1, 2016, Pastina borrowed $50,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
On March 1, 2016, the company lent a supplier $20,000 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2017.
On April 1, 2016, the company paid an insurance company $6,000 for a two-year fire insurance policy. The entire $6,000 was debited to insurance expense.
A customer paid Pastina $2,000 in December for 1,500 pounds of spaghetti to be delivered in January 2017. Pastina credited sales revenue.
On December 1, 2016, $2,000 rent was paid to the owner of the building. The payment represented rent for December 2016 and January 2017, at $1,000 per month.
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