On December 31, 2015, Harrenhal Inc. purchased $7,000 of merchandise inventory on a one-year, 11% note payable. Harrenhal uses a perpetual inventory system.

a. Journalize Harrenhals purchase of merchandise inventory on December 31, 2015.

b. Journalize Harrenhals accrual of interest expense on June 30, 2016its fiscal year end.

c. Journalize Harrenhals payment of the note plus interest on December 31, 2016.

In addition, on December 31, Harrenhal estimates that it will pay its employees a 3% bonus on $62,000 of net income, after deducting the bonus. The bonus will be paid on January 15 of the next year.

d. Journalize the December 31 transaction for Harrenhal.

e. Journalize the payment of the bonus on January 15.

Winterfell Inc.
Date	Account and details	REF	Debit	Credit
Dec 31, 2015		a
		a
	Purchased merchandise inventory in exchange for one year, 11% note.
June 30, 2016		b
		b
	Accrued interest expense at year-end.
Dec 31, 2016		c
		c
		c
		c
	Paid note and interest at maturity.
Dec 31, 2015		d
		d
	To record employee bonus expense. (3% $62,000) / (1.03) = $1,805.83
Jan 15, 2016		e
		e
	To record payment of employee bonus.