1)

Accrued Product Warranty

Parker Manufacturing Co. warrants its products for one year. Theestimated product warranty is 5% of sales. Assume that sales were$363,000 for January. In February, a customer received warrantyrepairs requiring $220 of parts and $80 of labor.

For a compound transaction, if an amount box does not require anentry, leave it blank.

a. Journalize the adjusting entryrequired at January 31, the end of the first month of the currentfiscal year, to record the accrued product warranty.

b. Journalize the entry to record thewarranty work provided in February.

2)

Liability Transactions

The following items were selected from among the transactionscompleted by O’Donnel Co. during the current year:

Jan. 10.	Purchased merchandise on account from Laine Co., $144,000,terms n/30.
Feb. 9.	Issued a 30-day, 8% note for $144,000 to Laine Co., onaccount.
Mar. 11.	Paid Laine Co. the amount owed on the note of February 9.
May 1.	Borrowed $154,800 from Tabata Bank, issuing a 45-day, 9%note.
June 1.	Purchased tools by issuing a $114,000, 60-day note to GibalaCo., which discounted the note at the rate of 6%.
15.	Paid Tabata Bank the interest due on the note of May 1 andrenewed the loan by issuing a new 45-day, 7% note for $154,800.(Journalize both the debit and credit to the notes payableaccount.)
July 30.	Paid Tabata Bank the amount due on the note of June 15.
30.	Paid Gibala Co. the amount due on the note of June 1.
Dec. 1.	Purchased office equipment from Warick Co. for $120,000, paying$20,000 and issuing a series of ten 5% notes for $10,000 each,coming due at 30-day intervals.
15.	Settled a product liability lawsuit with a customer for$63,000, payable in January. O’Donnel accrued the loss in alitigation claims payable account.
31.	Paid the amount due Warick Co. on the first note in the seriesissued on December 1.

Required:

1. Journalize the transactions. If anamount box does not require an entry, leave it blank. Assume a360-day year. Don't round the intermediate calculations and roundthe final answers to the nearest dollar amount.

For a compound transaction, accounts should be listed largest tosmallest.

2. Journalize the adjusting entry foreach of the following accrued expenses at the end of the currentyear: (a) product warranty cost, $13,500; (b) interest on the nineremaining notes owed to Warick Co. Assume a 360-day year. Roundyour answers to the nearest dollar amount.