Liability Transactions The following items were selected from among the transactions completed by O'Donnel Co. during the current year: Jan. 10. Purchased merchandise on account from Laine Co., $144,000, terms n/30. Feb. 9. Issued a 30-day, 7% note for $144,000 to Laine Co., on account. Mar. 11. Paid Laine Co. the amount owed on the note of February 9. May 1. Borrowed $151,200 from Tabata Bank, issuing a 45-day, 8% note. June 1. Purchased tools by issuing a $99,000, 60-day note to Gibala Co., which discounted the note at the rate of 9%. 15. Paid Tabata Bank the interest due on the note of May 1 and renewed the loan by issuing a new 45-day, 7% note for $151,200. (Journalize both the debit and credit to the notes payable account.) July 30. Paid Tabata Bank the amount due on the note of June 15. 30. Paid Gibala Co. the amount due on the note of June 1. Dec. 1. Purchased office equipment from Warick Co. for $132,000, paying $22,000 and issuing a series of ten 5% notes for $11,000 each, coming due at 30-day intervals. 15. Settled a product liability lawsuit with a customer for $55,000, payable in January. O'Donnel accrued the loss in a litigation claims payable account. 31. Paid the amount due Warick Co. on the first note in the series issued on December 1. Required: 1. Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a 360-day year. Don't round the intermediate calculations and round the final answers to the nearest dollar amount. For a compound transaction, accounts should be listed largest to smallest. Date Account Debit Credit Jan. Merchandise Inventory 144,000 10 Accounts Payable-Laine Co. 144,000 144,000 Feb. 9 Accounts Payable-Laine Co. Notes Payable 144,000 Mar Notes Payable 144,000 11 Interest Expense 840 Cash 144,840 May 1 Cash 151,200 Notes Payable 151,200 June Tools 74,125 X 1 1,485 Interest Expense Notes Payable 75,000 X June Notes Payable 139,200 x 15 1,392 x Interest Expense Notes Payable 139,200 X Cash 1,392 X July 30 Notes Payable 139,200 x Interest Expense 1,218 x Cash 140,418 x July 30 Notes Payable 75,000 X Cash 75,000 X 96,000 X Dec. 1 Office Equipment Notes Payable 80,000 x Cash 16,000 X 1,485 Interest Expense Notes Payable 75,000 X June 15 Notes Payable 139,200 X 1,392 x Interest Expense Notes Payable Cash 139,200 x 1,392 X July 30 Notes Payable 139,200 X Interest Expense 1,218 x Cash 140,418 x July 30 Notes Payable 75,000 x Cash 75,000 X Dec. 1 Office Equipment 96,000 X Notes Payable 80,000 X Cash 16,000 X Dec. Litigation Loss 74,000 x 15 Litigation Claims Payable 74,000 X Dec. Notes Payable 8,000 X 31 Interest Expense 33 x Cash 8,033 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $15,100; (b) interest on the nine remaining notes owed to Warick Co. Assume a 360-day year. Round your answers to the nearest dollar amount. Item Account Debit Credit 15,200 x Product Warranty Expense v Product Warranty Payable 15,200 x b. Interest Expense 300 X Interest Payable 300 x