Question
Question Content Area Liability Transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Feb. 15. Purchased
Question Content Area
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, 8% 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 $152,400 from Triple Creek Bank, issuing a 60-day, 9% note. |
July 21. | Purchased tools by issuing a $120,000, 90-day note to Poulin Co., which discounted the note at the rate of 9%. |
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 $152,400. (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. |
Dec. 1. | Purchased office equipment from Greenwood Co. for $108,000, paying $18,000 cash and issuing a series of ten 6% notes for $9,000 each, coming due at 30-day intervals. |
Dec. 12. | Settled a product liability lawsuit with a customer for $59,000, 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.
For a compound transaction, accounts should be listed largest to smallest.
Date | Account | Debit | Credit |
---|---|---|---|
Feb. 15 | Accounts Payable-Kirkwood Co.CashInventoryLitigation Claims PayableNotes Payable | fill in the blank 2 | fill in the blank 3 |
Accounts Payable-Kirkwood Co.CashInventoryNotes PayableOffice Equipment | fill in the blank 5 | fill in the blank 6 | |
Mar. 17 | Accounts Payable-Kirkwood Co.CashInterest ExpenseInventoryNotes Payable | fill in the blank 8 | fill in the blank 9 |
Accounts Payable-Kirkwood Co.CashInventoryNotes PayableOffice Equipment | fill in the blank 11 | fill in the blank 12 | |
May 16 | Accounts Payable-Kirkwood Co.Accounts Receivable-Kirkwood Co.CashInventoryNotes Payable | fill in the blank 14 | fill in the blank 15 |
Accounts Payable-Kirkwood Co.Accounts Receivable-Kirkwood Co.CashInterest ExpenseInventory | fill in the blank 17 | fill in the blank 18 | |
Accounts Payable-Kirkwood Co.CashInterest ExpenseInventoryNotes Payable | fill in the blank 20 | fill in the blank 21 | |
June 15 | Accounts PayableCashInterest ExpenseInventoryNotes Payable | fill in the blank 23 | fill in the blank 24 |
Accounts PayableCashInventoryLitigation Claims PayableNotes Payable | fill in the blank 26 | fill in the blank 27 | |
July 21 | Accounts PayableCashInventoryNotes PayableTools | fill in the blank 29 | fill in the blank 30 |
Accounts PayableAccounts ReceivableCashInterest ExpenseOffice Equipment | fill in the blank 32 | fill in the blank 33 | |
Accounts PayableCashInterest ExpenseNotes PayableTools | fill in the blank 35 | fill in the blank 36 | |
Aug. 14 | Accounts PayableCashLitigation Claims PayableNotes PayableTools | fill in the blank 38 | fill in the blank 39 |
Accounts PayableCashInterest ExpenseLitigation Claims PayableTools | fill in the blank 41 | fill in the blank 42 | |
Accounts ReceivableInventoryLitigation LossNotes PayableOffice Equipment | fill in the blank 44 | fill in the blank 45 | |
Accounts PayableCashInventoryOffice EquipmentTools | fill in the blank 47 | fill in the blank 48 | |
Oct. 13 | Accounts Payable-Triple Creek BankAccounts Receivable-Kirkwood Co.CashInventoryNotes Payable | fill in the blank 50 | fill in the blank 51 |
Accounts Payable-Triple Creek BankAccounts Receivable-Kirkwood Co.CashInterest ExpenseInventory | fill in the blank 53 | fill in the blank 54 | |
Accounts Payable-Triple Creek BankCashInterest ExpenseInventoryNotes Payable | fill in the blank 56 | fill in the blank 57 | |
Oct. 19 | Accounts PayableCashInventoryLitigation Claims PayableNotes Payable | fill in the blank 59 | fill in the blank 60 |
CashInterest ExpenseInventoryNotes PayableOffice Equipment | fill in the blank 62 | fill in the blank 63 | |
Dec. 1 | CashInterest ExpenseLitigation Claims PayableNotes PayableOffice Equipment | fill in the blank 65 | fill in the blank 66 |
Accounts PayableInterest ExpenseInventoryNotes PayableOffice Equipment | fill in the blank 68 | fill in the blank 69 | |
CashInterest ExpenseInventoryOffice EquipmentTools | fill in the blank 71 | fill in the blank 72 | |
Dec. 12 | CashInterest ExpenseLitigation Claims PayableLitigation LossNotes Payable | fill in the blank 74 | fill in the blank 75 |
CashInterest ExpenseLitigation Claims PayableLitigation LossNotes Payable | fill in the blank 77 | fill in the blank 78 | |
Dec. 31 | Accounts Payable-Greenwood Co.Accounts Receivable-Greenwood Co.CashInventoryNotes Payable | fill in the blank 80 | fill in the blank 81 |
Accounts Payable-Greenwood Co.Accounts Receivable-Greenwood Co.CashInterest ExpenseInventory | fill in the blank 83 | fill in the blank 84 | |
Accounts Payable-Greenwood Co.CashInterest ExpenseInventoryNotes Payable | fill in the blank 86 | fill in the blank 87 |
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $14,000; (b) interest on the nine remaining notes owed to Greenwood Co.
Item | Account | Debit | Credit |
---|---|---|---|
a. | CashLitigation Claims PayableLitigation LossProduct Warranty ExpenseProduct Warranty Payable | fill in the blank 89 | fill in the blank 90 |
CashLitigation Claims PayableLitigation LossProduct Warranty ExpenseProduct Warranty Payable | fill in the blank 92 | fill in the blank 93 | |
b. | CashInterest ExpenseInterest PayableNotes PayableProduct Warranty Payable | fill in the blank 95 | fill in the blank 96 |
CashInterest ExpenseInterest PayableProduct Warranty ExpenseProduct Warranty Payable | fill in the blank 98 | fill in the blank 99 |
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