Additional interest for five months needs to be accrued on the $30,000, 6% note payable obtained on August 1, 2024. Recall that annual interest is paid each July 31. Assume that $10,000 of the $30,000 note discussed above is due next year. Record the entry to reclassify the current portion of the long-term note. By the end of the year, $20,000 in gift cards have been redeemed. The company had sold gift cards of $25,000 during the year and recorded those as Deferred Revenue. Great Adventures is a defendant in litigation involving a biking accident during one of its adventure races. The company believes the likelihood of payment occurring is probable, and the estimated amount to be paid is $12,000. For sales of MU watches, Great Adventures offers a warranty against defect for one year. At the end of the year, the company estimates future warranty costs to be $4,000. Record entry to close the revenue accounts. Record entry to close the expense accounts.

Journal entry worksheet Record entry to close the revenue accounts. Note: Enter debits before credits