Liability Transactions The following items were selected from among the transactions completed by Shin Co. during the current year: Jan. 10. Purchased merchandise on account from Beckham Co., $144,000, terms n/30. Feb. 9. Issued a 30-day, 7% note for $144,000 to Beckham Co., on account. Mar. 11. Paid Beckham Co. the amount owed on the note of February 9. May 1. Borrowed $151,200 from Verity Bank, issuing a 45-day, 8% note. June 1. Purchased tools by issuing a $72,000, 60-day note to Rassmuessen Co., which discounted the note at the rate of 9%. 15. Paid Verity 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 Verity Bank the amount due on the note of June 15. 30. Paid Rassmuessen Co. the amount due on the note of June 1. Dec. 1. Purchased office equipment from Lambert 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 $57,000, payable in January. Shin accrued the loss in a litigation claims payable account. 31. Paid the amount due Lambert 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. 10 Merchandise Inventory 144,000 Accounts Payable-Beckham Co. 144,000 Feb. 9 Accounts Payable-Beckham Co. 144,000 Notes Payable 144,000 Mar. 11 Notes Payable 144,000 Interest Expense 840 Cash 144,840 May 1 Cash 151,200 Notes Payable 151,200 June 1 Tools Interest Expense Notes Payable 72,000 X 1,080 73,080 X June 15 Notes Payable Interest Expense Notes Payable Cash July 30 Notes Payable Interest Expense Cash July 30 Notes Payable Cash Dec. 1 Office Equipment Notes Payable Cash Dec. 15 Litigation Loss Litigation Claims Payable Dec. 31 Notes Payable Interest Expense 000 00 000 000 10 101 Dec. 31 Notes Payable Interest Expense Cash 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $17,800; (b) interest on the nine remaining notes owed to Lambert Co. Assume a 360-day year. Round your answers to the nearest dollar amount. a. b. Item Account Product Warranty Expense Feedback Product Warranty Payable Interest Expense Interest Payable Debit Credit 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. Remember that the interest on the nine remaining notes is an accrued expense adjusting entry, which means that at least one balance sheet account and one income statement account is affected