1. Recall that Cookie Creations sells fine European mixers that it purchases from Kzinski Supply Co. Kzinski warrants the the mixer has such a defect, Kzinski will repair or replace the mixer free of charge for parts and labor. The product must return the product to the consumer is paid by Kzinski.

The authorized service center is located in Boston. Because Cookie Creations values serving its customers, it pays the shipping to Boston for any mixers needing repair under Kzinski's warranty terms. Based on past experience, Kzinski has Boston is $60.

The following transactions take place in 2020 and 2021.

1. A total of 30 mixers are sold in 2020.

2. Four of the mixers sold in 2020 are returned for repair in 2021. The total shipping cost for returning these four mixers to Boston is $210

3. A total of 40 mixers are sold in 2021.

4. Two of the mixer sold in 2021 are returned for repari in2021. The total shipping cost for returning these two mixers to Boston is $55.

Calculate Cookie Creations' warranty liability for the shipping costs at December 31, 2020.

Prepare the summary journal entry (or entries) to record the shipment of the six mixers (four from the 2020 sales and two from the 2021 sales) for warranty repair in 2021.

Account Titles and Explanation	Debit	Credit
(To record shipment of 2020.)
Warranty Liability
Cash
(To record shipment of 2021.)

Calculate Cookie Creations' warranty liability at December 31, 2021. (Hint: Note that there is no liability outstanding for the mixers sold in 2020. The one-year warranty period has expired.)

2. Natalie and Curtis have been experiencing great demand for their cookies and muffins. As a result, they are now thinking about buying a commercial oven. They know which oven they want and that it will cost $17,000. The company already has $5,000 set aside for the purchase and will need to borrow the rest.

Natalie and Curtis met with a bank manager to discuss their options. She is willing to lend Cookie & Coffee Creations Inc. $12,000 on November 1, 2020, for a period of 3 years at a 5% interest rate. The terms provide for fixed principal payments of $2,000, on May 1 and November 1 of each year plus 6 months of interest.

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Prepare a payment schedule for the life of the note. (If answer is 0, please enter 0. Do not leave any fields blank.) Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance Nov. 2020 12000 May 2021 300 2300 2000 10000 Nov. 2021 2000 8000 2250 250 May 2022 2200 200 2000 6000 Nov. 2022 2150 150 2000 4000 May 2023 2100 100 2000 2000 Nov. 2023 2050 50 2000 Totals 13050 1050 12000