Liability Transactions The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year: Feb. 15. Purchased merchandise on account from Hood Co., $144,000, terms n/30. Mar. 17. Issued a 60-day, 6% note for $144,000 to Hood Co., on account. May 16. Paid Hood Co. the amount owed on the note of March 17. June 15. Borrowed $160,800 from Acme Bank, issuing a 60-day, 7% note. July 21. Purchased tools by issuing a $84,000, 90-day note to Columbia Supply Co., which discounted the note at the rate of 6%. Aug. 14. Paid Acme Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $160,800. (Journalize both the debit and credit to the notes payable account.) Oct. 13. Paid Acme Bank the amount due on the note of August 14. Oct. 19. Paid Columbia Supply Co. the amount due on the note of July 21. Dec. 1. Purchased office equipment from Mountain Equipment Co. for $132,000, paying $22,000 and issuing a series of ten 6% notes for $11,000 each, coming due at 30-day intervals. Dec. 12. Settled a product liability lawsuit with a customer for $57,000, payable in January. Emerald Bay accrued the loss in a litigation claims payable account. Dec. 31. Paid the amount due Mountain Equipment 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. Credit For a compound transaction, accounts should be listed largest to smallest. Date Account Debit Feb. 15 Inventory 144,000 Accounts Payable - Hood Co. 144,000 Mar. 17 Accounts Payable - Hood Co. 144,000 Notes Payable 144,000 May 16 144,000 Notes Payable Interest Expense Cash 1,440 145,4407 June 15 Cash 160,800 Notes Payable 160,800 July 21 Tools 112,290 X Interest Expense 1,710 X Notes Payable 114,000 X Aug. 14 Notes Payable 160,800 Interest Expense 1,876 Notes Payable 160,8007 Cash 1,876 Oct. 13 160,800 Notes Payable Interest Expense 2,680 Cash 163,480 Oct, 19 Notes Payable 114,000 X Cash 114,000 X Dec. 1 Office Equipment 120,000 X Notes Payable 100,000 X Cash 20,000 X Dec. 12 Litigation Loss 79,000 x Litigation Claims Payable 79,000 X Dec. 3: Notes Payable 10,000 X Interest Expense 50 X Cash 10,050 x 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $13,800; (b) interest on the nine remaining notes owed to Mountain Equipment Co. Item Account Debit Credit