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Dec. 1 The company borrowed $108,000 from a bank on a five-year loan payable. The terms of the loan stipulate that Lyrtricks must repay 1/5
Dec. 1 | The company borrowed $108,000 from a bank on a five-year loan payable. The terms of the loan stipulate that Lyrtricks must repay 1/5 of the principal every November 30 plus the interest accrued to that date. The loan bears interest at 10% per annum. | |
Dec. 31 | Accrued warranty expense, which is estimated at 2% of sales for the month of $139,800. | |
Dec. 31 | Recorded employee wages for December. The wages earned by employees amounted to $10,700 and the company withheld CPP of $582, EI of $522, and income taxes of $2,354. Lyrtricks employer contributions were $582 for CPP and $731 for EI. | |
Dec. 31 | Recorded the adjusting entry to record the interest incurred on the bank loan during December. | |
Dec. 31 | Recorded the entry to reclassify the current portion of the bank loan. | |
2017 | ||
Jan. 2 | The company paid the wages recorded on December 31. | |
Jan. 10 | A customer returned a defective product that was still under warranty. The product was not usable and the customer requested and received a full refund in the amount of $870. | |
Jan. 15 | Made the remittance to the government related to the December 31 payroll. |
Prepare all necessary journal entries related to the above transactions.
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