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The following items were selected from among the transactions completed by Aston Martin Inc. during the current year: Apr. 15 Borrowed $225,000 from Audi Company,
The following items were selected from among the transactions completed by Aston Martin Inc. during the current year:
Apr. | 15 | Borrowed $225,000 from Audi Company, issuing a 30-day, 6% note for that amount. |
May | 1 | Purchased equipment by issuing a $320,000, 180-day note to Spyder Manufacturing Co., which discounted the note at the rate of 6%. |
15 | Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% note for $225,000. (Record both the debit and credit to the notes payable account.) | |
Jul. | 14 | Paid Audi Company the amount due on the note of May 15. |
Aug. | 16 | Purchased merchandise on account from Exige Co., $90,000, terms, n/30. |
Sep. | 15 | Issued a 45-day, 6% note for $90,000 to Exige Co., on account. |
Oct. | 28 | Paid Spyder Manufacturing Co. the amount due on the note of May 1. |
30 | Paid Exige Co. the amount owed on the note of September 15. | |
Nov. | 16 | Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and issuing a series of twenty 9% notes for $20,000 each, coming due at 45-day intervals. |
Dec. | 16 | Paid the amount due Gallardo Co. on the first note in the series issued on November 16. |
28 | Settled a personal injury lawsuit with a customer for $87,500, to be paid in January. Aston Martin Inc. accrued the loss in a litigation claims payable account. |
Required: | |||||
1. | Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. | ||||
2. | Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):
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