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ACC 1 1 0 - Principles of Accounting II Assignment Problem 1 0 - 1 A: Liability Transactions The following items were selected from among

ACC 110- Principles of Accounting II
Assignment Problem 10-1A: Liability Transactions
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
\table[[Mar.,1.,Purchased merchandise on account from Kirkwood Co., $215,000, terms n/30.],[,31.,Issued a 30-day, 6% note for $215,000 to Kirkwood Co., on account.],[Apr.,30.,Paid Kirkwood Co. the amount owed on the note of March 31.],[June,1.,Borrowed $400,000 from Triple Creek Bank, issuing a 45-day, 8% note.],[July,1.,\table[[Purchased tools by issuing a $60,000,60-day note to Poulin Co., which discounted the],[note at the rate of 6%.]]],[16.,\table[[Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by],[issuing a new 30-day, 9% note for $400,000.(Journalize both the debit and credit to the],[notes payable account.)]]],[Aug.,15.,Paid Triple Creek Bank the amount due on the note of July 16.],[30.,Paid Poulin Co. the amount due on the note of July 1.],[Dec.,1.,\table[[Purchased equipment from Greenwood Co. for $320,000, paying $120,000 cash and],[issuing a series of ten 6% notes for $20,000 each, coming due at 30-day intervals.]]],[22.,\table[[Settled a product liability lawsuit with a customer for $50,000, payable in January.],[Accrued the loss in a litigation claims payable account.]]],[31.,\table[[Paid the amount due to Greenwood Co. on the first note in the series issued on],[December 1.]]]]
Directions:
Journalize the transactions.
Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:
a. Product warranty cost, $70,000.
b. Interest on the nine remaining notes owed to Greenwood Co.
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