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Liability transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Date Transaction Feb. 15. Purchased merchandise
Liability transactions
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Date | Transaction |
---|---|
Feb. 15. | Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30. |
Mar. 17. | Issued a 60-day, 6% note for $144,000 to Kirkwood Co., on account. |
May 16. | Paid Kirkwood Co. the amount owed on the note of March 17. |
June 15. | Borrowed $150,000 from Triple Creek Bank, issuing a 60-day, 7% note. |
July 21. | Purchased tools by issuing a $84,000, 90-day note to Poulin Co., which discounted the note at the rate of 9%. |
Aug. 14. | Paid Triple Creek Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $150,000. (Journalize both the debit and credit to the notes payable account.) |
Oct. 13. | Paid Triple Creek Bank the amount due on the note of August 14. |
Oct. 19. | Paid Poulin Co. the amount due on the note of July 21. |
Dec. 1. | Purchased equipment from Greenwood Co. for $144,000, paying $24,000 cash 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 $85,000, payable in January. Accrued the loss in a litigation claims payable account. |
Dec. 31. | Paid the amount due to Greenwood 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. Do not round intermediate calculations. When required, round your final answers to one decimal places.
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