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, 8% 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 $147,600 from Acme Bank, issuing a 60-day, 9% note. July 21. Purchased tools by issuing a $81,000, 90-day note to Columbia Supply Co., which discounted the note at the rate of 9%. 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 $147,600. (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 $144,000, paying $24,000 and issuing a series of ten 6% notes for $12,000 each, coming due at 30-day intervals. Dec. 12. Settled a product liability lawsuit with a customer for $66,000, payable in January. Emerald Bay accrued the loss in a litigation claims payable account. Paid the amount due Mountain Equipment Co. on the first note in the series issued on December 1. Dec. 31. blank. Assume a 360-day year. For a compound transaction, accounts should be listed largest to smallest. Data Account Credit Feb. 15 Inventory 144,000 Accounts Hoed 144.000 De Mar. 17 144,000 Accounts Payable Notes Pave 144,000 May 16 144,000 Nestle Interest Cash 1.920 145.920 Pune Is 147,600 Cash Net 147.100 July 21 Toc 76,830 1.170 Aug. 14 Interesse Nestle Cash oct. 11 Pawahi Interest Free Cash l ll lll llll Joct. 19 Nos Para Cash [Dec Osment MP Cash Dec 12 69.000 x Utation Loss nation Claims able 13,000 Dec 31 Nese Interest 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 Mountain Equipment Co. Account Debit Credit Product Warranty Expense Product Warranty Payable Item b. Interest Expense Interest Payable Feedback Check My Work