A company incurred the following transactions:

Income tax expense of $1,400 for the current period is accrued. Of the accrual, $400 represents deferred tax liabilities.

Bonds payable with a face amount of $15,000 are issued at a price of 98.

Of the proceeds from the bonds in part b, $9,000 is used to purchase land for future expansion.

Because of warranty claims, finished goods inventory costing $128 is sent to customers to replace defective products.

A three-month, 9% note payable with a face amount of $60,000 was signed. The bank made the loan on a discount basis.

The next installment of a long-term serial bond requiring an annual principal repayment of $70,000 will become due within the current year.

5.

value: 10.00 points

Required information

Required:

a-1. Show the effect, if any, of each transaction/adjustment on the appropriate balance sheet category or on net income by selecting for each category affected the account name and amount, and indicating whether it is an addition (+) or a subtraction (). Items that affect net income should not also be shown as affecting stockholders' equity.