1.The business was started when the company received $48,500 from the issue of common stock.

2.Purchased merchandise inventory of $175,000 on account.

3.Sold merchandise for $195,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $120,500.

4.Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales.

5.Paid the sales tax to the state agency on $145,500 of the sales.

6.On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2.

7.Paid $5,600 for warranty repairs during the year.

8.Paid operating expenses of $54,000 for the year.

9.Paid $124,800 of accounts payable.

10.Recorded accrued interest on the note issued in transaction number 6.

b1. Prepare the journal entries for the preceding transactions.

b2. Post the transaction to the appropriate T-accounts.

Journal Entry Worksheet:

1.The business was started when the company received $48,500 from the issue of common stock. Record the transaction.

2.Purchased merchandise inventory of $175,000 on account. Record the transaction.

3.Sold merchandise for $195,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. Record the transaction.

4.The merchandise sold had a cost of $120,500. Record the transaction.

5. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 5 percent of sales. Record the transaction.

6. Paid the sales tax to the state agency on $145,500 of the sales. Record the transaction.

7. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2. Record the transaction.

8. Paid $5,600 for warranty repairs during the year. Record the transaction.

9.Paid operating expenses of $54,000 for the year. Record the transaction.

10. Paid $124,800 of accounts payable. Record the transaction.

11. Recorded accrued interest on the note issued in transaction number 6. Record the transaction.

Complete this question by entering your answers in the tabs below. Req B1 Req B2 Post the transactions to the appropriate T-accounts. (Round your answers to the nearest dollar amount.) Cash Merchandise Inventory Beginning Balance Beginning Balance Ending Balance Ending Balance Accounts Payable Sales Tax Payable Beginning Balance Beginning Balance Ending Balance Ending Balance Warranties Payable Interest Payable Beginning Balance Beginning Balance Ending Balance Ending Balance Notes Payable Common Stock Beginning Balance Beg. Bal. Ending Balance Ending Balance Sales Revenue Cost of Goods Sold Beginning Balance Beginning Balance Ending Balance Ending Balance Operating expense Warranty Expense Beginning Balance Beginning Balance Ending Balance Ending Balance Interest Expense Beginning Balance Ending Balance