Question 1 (20%)

The following transactions of Lovely Music Company occurred during 2019 and 2020:

2019 Mar 3 Purchased a piano (inventory) for 35,000, signing a six-month, 10% note payable. May 31 Borrowed 75,000 on an 8% note payable that calls for annual installment payments of 15,000 principal plus interest. Recorded the short-term note payable in a separate account from the long-term note payable. Sep 3 Paid the six-month, 10% note at maturity. Dec 31 Accrued warranty expense, which is estimated at 1.5% of sales of 198,000. Dec 31 Accrued interest on the outstanding note payable. 2020 May 31 Paid the first installment and interest for one year on the outstanding note payable.

Requirement: Record the transactions in Lovely Music Companys journal. Explanations are not required.