Probiems (Group B) Journalizing liability P11-31B The following transactions of Pan-American Paper Company during 2006 and 2007 2006 Feb. 3 Purchased equipment for $40,000, signing a six-month, 9% note payable. Recorded the week's sales of $60,000, one-third for cash, and two-thirds on credit. All sales amounts are subject to a 5% sales tax. Sent last week's sales tax to the stat. 28 Mar. 7 584 Chapter 11 Borrowed $100,000 on a long-term, 9% note payable that calls for annual payment of interest each April 30. Paid the six-month, 9% note at maturity. Purchased inventory at a cost of $7,000, signing a three- month, 6% note payable for that amount. Accrued warranty expense, which is estimated at 3% of sales of $200,000. Apt 30 3 Aug. Nov. 30 Dec. 31 1 Accrued interest on all outstanding notes payable. Make a separate interest accrual entry for each note payable. 2007 Feb. 28 Apr. 30 Paid off the 6% inventory note, plus interest, at maturity. Paid the interest for one year on the long-term note payable. Record the transactions in Pan American's general journal. Explanations are not required. (pp. 551-552, 554)