On January 1, 2003, the ledger of Molega Software Company contains the following liability accounts:

Accounts Payable $42,500 Goods and Services Tax Payable 5,800 Provincial Sales Tax Payable 5,800 Unearned Service Revenue 15,000

During January the following selected transactions occurred: Jan. 1 - Borrowed $15,000 in cash on a four-month, 10%, $15,000 note. Interest is payable at maturity. 5 - Sold merchandise for cash totalling $7,752, which included 7% GST and 7% PST. The cost of this sale was $4,600. Molega Software uses a perpetual inventory system. 12 - Provided services for customers who had made advance payments of $8,000. 14 - Paid the Receiver General and Provincial Treasurer for sales taxes collected in December of 2002, $11,600 ($5,800 + $5,800). 20 - Sold 500 units of a new product on credit at $52 per unit, plus 7% GST and 7% PST. This new product is subject to a one-year warranty. The cost of this sale was $20 per unit. 25 - Sold merchandise for cash totalling $14,820, which included sales taxes (7% GST and 7% PST). The cost of this sale was $9,000. Instructions (a) Journalize the January transactions. (b) Journalize the adjusting entries at January 31 for (1) interest on the outstanding note payable, and (2) estimated warranty liability, assuming warranty costs are expected to equal 8% of sales of the new product. (c) Prepare the current liabilities section of the balance sheet at January 31, 2003. Assume no change in Accounts Payable.