On January 1, 2015, the ledger of Accardo Company contains the following liability accounts.

Accounts Payable ........................... $52,000

Sales Taxes Payable ........................... 7,700

Unearned Service Revenue ............. 16,000

During January, the following selected transactions occurred.

Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.

12 Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.)

14 Paid state revenue department for sales taxes collected in December 2014 ($7,700).

20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax.

21 Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note.

25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.

Instructions

Journalize the January transactions.

Journalize the adjusting entry at January 31 for the outstanding note payable. (Hint: Use one-third of a month for the Girard Bank note.)

Prepare the current liabilities section of the balance sheet at January 31, 2015. Assume no change in accounts payable.