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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

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, 8% 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 $176,400 from Verity Bank, issuing a 45-day, 9% note.
June 1. Purchased tools by issuing a $93,000, 60-day note to Rassmuessen Co., which discounted the note at the rate of 8%.
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 $176,400. (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 $120,000, paying $20,000 and issuing a series of ten 5% notes for $10,000 each, coming due at 30-day intervals.
15. Settled a product liability lawsuit with a customer for $72,000, 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

Accounts Payable-Beckham Co.CashLitigation Claims PayableMerchandise InventoryNotes Payable

fill in the blank 2 fill in the blank 3

Accounts Payable-Beckham Co.CashMerchandise InventoryNotes PayableOffice Equipment

fill in the blank 5 fill in the blank 6
Feb. 9

Accounts Payable-Beckham Co.CashInterest ExpenseMerchandise InventoryNotes Payable

fill in the blank 8 fill in the blank 9

Accounts Payable-Beckham Co.CashMerchandise InventoryNotes PayableOffice Equipment

fill in the blank 11 fill in the blank 12
Mar. 11

Accounts Payable-Beckham Co.Accounts Receivable - Beckham Co.CashMerchandise InventoryNotes Payable

fill in the blank 14 fill in the blank 15

Accounts Payable-Beckham Co.Accounts Receivable - Beckham Co.CashInterest ExpenseMerchandise Inventory

fill in the blank 17 fill in the blank 18

Accounts Payable-Beckham Co.CashInterest ExpenseMerchandise InventoryNotes Payable

fill in the blank 20 fill in the blank 21
May 1

Accounts PayableCashInterest ExpenseMerchandise InventoryNotes Payable

fill in the blank 23 fill in the blank 24

Accounts PayableCashLitigation Claims PayableMerchandise InventoryNotes Payable

fill in the blank 26 fill in the blank 27
June 1

Accounts PayableCashMerchandise InventoryNotes PayableTools

fill in the blank 29 fill in the blank 30

Accounts PayableAccounts ReceivableCashInterest ExpenseOffice Equipment

fill in the blank 32 fill in the blank 33

Accounts PayableCashInterest ExpenseNotes PayableTools

fill in the blank 35 fill in the blank 36
June 15

Accounts PayableCashLitigation Claims PayableNotes PayableTools

fill in the blank 38 fill in the blank 39

Accounts PayableCashInterest ExpenseLitigation Claims PayableTools

fill in the blank 41 fill in the blank 42

Accounts ReceivableLitigation LossMerchandise InventoryNotes PayableOffice Equipment

fill in the blank 44 fill in the blank 45

Accounts PayableCashMerchandise InventoryOffice EquipmentTools

fill in the blank 47 fill in the blank 48
July 30

Accounts Payable-Verity BankAccounts Receivable - Beckham Co.CashMerchandise InventoryNotes Payable

fill in the blank 50 fill in the blank 51

Accounts Payable-Verity BankAccounts Receivable-Beckham Co.CashInterest ExpenseMerchandise Inventory

fill in the blank 53 fill in the blank 54

Accounts Payable-Verity BankCashInterest ExpenseMerchandise InventoryNotes Payable

fill in the blank 56 fill in the blank 57
July 30

Accounts PayableCashLitigation Claims PayableMerchandise InventoryNotes Payable

fill in the blank 59 fill in the blank 60

CashInterest ExpenseMerchandise InventoryNotes PayableOffice Equipment

fill in the blank 62 fill in the blank 63
Dec. 1

CashInterest ExpenseLitigation Claims PayableNotes PayableOffice Equipment

fill in the blank 65 fill in the blank 66

Accounts PayableInterest ExpenseMerchandise InventoryNotes PayableOffice Equipment

fill in the blank 68 fill in the blank 69

CashInterest ExpenseMerchandise InventoryOffice EquipmentTools

fill in the blank 71 fill in the blank 72
Dec. 15

CashInterest ExpenseLitigation Claims PayableLitigation LossNotes Payable

fill in the blank 74 fill in the blank 75

CashInterest ExpenseLitigation Claims PayableLitigation LossNotes Payable

fill in the blank 77 fill in the blank 78
Dec. 31

Accounts Payable-Lambert Co.Accounts Receivable - Lambert Co.CashMerchandise InventoryNotes Payable

fill in the blank 80 fill in the blank 81

Accounts Payable-Lambert Co.Accounts Receivable - Lambert Co.CashInterest ExpenseMerchandise Inventory

fill in the blank 83 fill in the blank 84

Accounts Payable-Lambert Co.CashInterest ExpenseMerchandise InventoryNotes Payable

fill in the blank 86 fill in the blank 87

2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $17,500; (b) interest on the nine remaining notes owed to Lambert Co. Assume a 360-day year. Round your answers to the nearest dollar amount.

Item Account Debit Credit
a.

CashLitigation Claims PayableLitigation LossProduct Warranty ExpenseProduct Warranty Payable

fill in the blank 89 fill in the blank 90

CashLitigation Claims PayableLitigation LossProduct Warranty ExpenseProduct Warranty Payable

fill in the blank 92 fill in the blank 93
b.

CashInterest ExpenseInterest PayableNotes PayableProduct Warranty Payable

fill in the blank 95 fill in the blank 96

CashInterest ExpenseInterest PayableProduct Warranty ExpenseProduct Warranty Payable

fill in the blank 98 fill in the blank 99

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