Recording and Reporting Liabilities

The following selected transactions of Johnson Motors Company were completed during the current accounting year ended December $31.$

March $1,$ borrowed $$20,000$ on a two$-$year, $12\%$ interest$-$bearing note. Interest is paid annually.

April $1,$ borrowed cash and signed a $$16,000,$ two$-$year, noninterest$-$bearing note. The market rate for this level of risk was $12\%.$

June $1,$ purchased a truck with a list phe of $$26,400.$ Paid $$2,400$ cash and signed a $$24,000,$ one$-$year, noninterest$-$bearing note. The market rate for this level of risk was $12\%.$

During the year, sold merchandise for $$24,000$ cash that carried a two$-$year warranty for parts and labor. A reasonable estimate of the cost of the warranty is $1\mathrm{.}5\%$ of sales revenue. By December $31,$ actual warranty costs amounted to $$200.$

June $1,$ Johnson cosigned and guaranteed payment of a $$40,000,14\%,$ one$-$year note owed by a local supplier to City Bank. The bank required a cosignature; but Johnson believes that default by the debtor is only reasonably possible.

Property taxes for the year are recorded monthly.

Prior$-$year property taxes were $$1,670$ and were expected to increase by $15\%$ during the year.

December $10$ final tax assessment received was $$2,000$ and was paid on February $1$ of the following year.

In December a $$16,000$ cash dividends was declared $($not yet paid or issued$).$

For the month of December, sales revenue $($excluding sales taxes collected$)$ was $$320,000.$ Sales tax is $5\%,$ applicable to $98\%$ of the sales. No unpaid sales tax

carried over from November.

On December $31,$ interest has accrued on outstanding notes.

Part A$-$Journal Entries

Part B $-$ Financial Statement Presentation

a$.$ For each of the nine items, provide the entries that the company should make during the year. Ignore depreciation entries.

Note: If a journal entry isn't required on any of the dates shown, select $"$N$/$A$-$debit" and $"$N$/$A$-$credit" as the account names and leave the Dr$.$ and $Cr.$ answers blank $($zero$),$

Note: Round answers to the nearest whole dollar.