Question
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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