Liability Transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: 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 $160,800 from Triple Creek Bank, issuing a 60-day, 7% note. July 21. Purchased tools by issuing a $105,000, 90-day note to Poulin Co., which discounted the note at the rate of 8%. 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 $160,800. (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. ten 6% Dec. 1. Purchased office equipment from Greenwood Co. for $132,000, paying $22,000 cash and issuing a series notes for $11,000 each, coming due at 30-day intervals. Dec. 12. Settled a product liability lawsuit with a customer for $82,000, 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. If required, round to one decimal place. Don't round the intermediate calculations. 1. Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a 360-day year. If required, round to one decimal place. Don't round the intermediate calculations. For a compound transaction, accounts should be listed largest to smallest. Date Account Debit Credit Feb. 15 Inventory 144,000 Accounts Payable-Kirkwood Co. 144,000 Mar. 17 Accounts Payable-Kirkwood Co. 144,000 Notes Payable 144,000 May 16 Notes Payable 144,000 Interest Expense 1,440 Cash 145,440 June 15 Cash 153,600 X Notes Payable 175,200 x June 15 Cash 153,600 X Notes Payable 175,200 x July 21 Tools 112,290 x Interest Expense 1,530 X Notes Payable 102,000 x Aug. 14 Notes Payable 175,200 X Interest Expense 1,752 X Notes Payable 175,200 X Cash 1,752 x Oct. 13 Notes Payable 175,200 X Interest Expense 2,920 X Cash 178,120 X Aug. 14 Notes Payable 175,200 x Interest Expense 1,752 X Notes Payable 175,200 X Cash 1,752 x Oct. 13 Notes Payable 175,200 x Interest Expense 2,920 X Cash 178,120 x Oct. 19 Notes Payable 102,000 Cash 102,000 X Dec. 1 Office Equipment 144,000 X Notes Payable 120,000 x Cash 24,000 X Dec. 12 Litigation Loss 77,000 X Dec. 12 Litigation Loss 77,000 X Litigation Claims Payable 77,000 X Dec. 31 Notes Payable 12,000 x Interest Expense 60 Cash 12,060 x 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cos $17,800; (b) interest on the nine remaining notes owed to Greenwood Co. Item Account Debit Credit a. Product Warranty Expense 14,900 x Product Warranty Payable 14,900 X b. Interest Expense 540 Interest Payable 540