#1 Adjusto Corporation (which is on a December 31 fiscal year end) engaged in the following transactions during 2016 and 2017: 2016 Nov. 1 Issued a 120-day, 12% note, face value of $20,000, to Johnson Company to settle an open account of that amount. Dec. 1 Issued a 90-day, 12% note, face value of $32,000, to Winslow Corporation for the purchase of merchandise (the perpetual inventory method is used). 2017 Mar. 1 Paid the principal and interest on both the Johnson and the Winslow notes. Required: Prepare journal entries to record the preceding transactions on Adjusto's books, including the adjusting entries at the end of 2016. Assume a 360-day year. #2 Rexallo Company begins business on January 2, 2016, with 15 employees. Its company policy is to permit each employee to take 6 days of paid sick leave each year and 1% days of paid vacation leave for each month worked. The sick leave, if not used, accumulates to a 24-day maximum. The vacation leave accumulates for 2 years, but at any time after a 1-year period, the employee may request additional compensation in lieu of taking paid vacation leave. Rexallo prefers to record the liability for $100 per day. compensated absences on a quarterly basis. Assume that the gross salaries for each employee are The following selected events take place during the first two quarters of 2016: On March 31, 2016, the quarterly liability for compensated absences is to be recorded. On April 30, 2016, the following $45,000 monthly payroll, including paid vacation and sick leave, is summarized from Rexallo's records: Payroll for Time Worked Vacation Taken Sick Leave Taken Salaries $42,000 $1,800 $1,200 . On June 30, 2016, the quarterly liability for compensated absences is to be recorded. Required: 1 Prepare journal entries to record the preceding events, ignoring payroll taxes and assuming that both sick leave and vacation time meet the requirements of GAAP for accrual. 2. Prepare a partial interim balance sheet as of June 30, 2016, to disclose the