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On april 1, the company retained an attorney for a flat monthly fee of $3,500. Payment for april legal services was made by the company on may 12. Prepare the required adjusting entry, if any

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Answer:

On April 30,

Dr Attorney Fee Expense $3500

Cr Attorney Fee Payables $3500

On May 12,

Dr Attorney Fee Payables $3500

Cr Cash Account $3500

Step-by-step explanation:

Okay here the attorney fee is the legal fee expense that was accrued in April and must accounted for as accrued expense. The accounting entry would be increase in payables (Credit) and expense (Debit) as well.

Dr Attorney Fee Expense $3500

Cr Attorney Fee Payables $3500

Now on May 12, the company paid the expense which means that the legal fee payable was reduced to zero (Reduction in liabilities is always debited) and the cash is also reduced by $3500 (Asset reduction is always credited).

Dr Attorney Fee Payables $3500

Cr Cash Account $3500

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