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 $144,000 from Tabata Bank, issuing a 45 -day, 8% note. June 1. Purchased tools by issuing a $72,000,60-day note to Gibala Co., which discounted the note at the rate of 7%. 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 $144,000. (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 $108,000, paying $18,000 and issuing a series of ten 5% notes for $9,000 each, coming due at 30 -day intervals. 15. Settled a product liability lawsuit with a customer for $84,000, 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: Check My Work Consider why the note is being issued (for cash, merchandise, other long-term assets). Consider what type of note is being issued (discount or interest-bearing). Consider the definition of proceeds. When making a payment on a note what accounts would be affected? What accounts would have to decrease? Product warranty adjustments are recorded in the same period in which the related sales are recorded