The following items were selected from among the transactions completed by Pioneer Co. during the current year:

Mar.1 Purchased merchandise on account from Galston Co., $360,000, terms n/30.

31 Issued a 30-day, 5% note for $360,000 to Galston Co., on account.

Apr.30 Paid Galston Co. the amount owed on the note of March 31.

Jun.1 Borrowed $180,000 from Pilati Bank, issuing a 45-day, 4% note.

Jul.1 Purchased tools by issuing a $210,000, 60-day note to Zegna Co., which discounted the note at the rate of 7%.

Jun 16 Paid Pilati Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6.5% note for $180,000. (Journalize both the debit and credit to the notes payable account.)

Aug.15 Paid Pilati Bank the amount due on the note of July 16.

Aug 30 Paid Zegna Co. the amount due on the note of July 1.

Dec.1 Purchased office equipment from Taylor Co. for $500,000, paying $120,000 and issuing a series of ten 6% notes for $38,000 each, coming due at 30-day intervals.22Settled a product liability lawsuit with a customer for $310,000, payable in January. Pioneer accrued the loss in a litigation claims payable account.

Dec 31 Paid the amount due Taylor Co. on the first note in the series issued on December 1.

Required:

1) Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year.

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):

A. Product warranty cost, $27,500.

B. Interest on the nine remaining notes owed to Taylor Co. Assume a 360-day year.

CHART OF ACCOUNTS

Pioneer Co.

General Ledger

ASSETS

110Cash

111Accounts Receivable

112Interest Receivable

113Notes Receivable

115Merchandise Inventory

116Supplies

118Prepaid Insurance

120Land

123Building

124Accumulated Depreciation-Building

125Office Equipment

126Accumulated Depreciation-Office Equipment

127Tools

128Accumulated Depreciation-Tools

LIABILITIES

210Accounts Payable-Galston Co.

211Accounts Payable-Taylor Co.

212Accounts Payable-Zegna Co.

213Interest Payable

214Notes Payable

215Salaries Payable

216Social Security Tax Payable

217Medicare Tax Payable

218Employees Federal Income Tax Payable

219Employees State Income Tax Payable

220Group Insurance Payable

221Bond Deductions Payable

224Federal Unemployment Tax Payable

225State Unemployment Tax Payable

226Vacation Pay Payable

227Unfunded Pension Liability

228Product Warranty Payable

229Litigation Claims Payable

EQUITY

310Owner, Capital

311Owner, Drawing

312Income Summary

REVENUE

410Sales

610Interest Revenue

EXPENSES

510Cost of Merchandise Sold

520Salaries Expense

524Depreciation Expense-Building

525Delivery Expense

526Repairs Expense

529Selling Expenses

531Rent Expense

532Depreciation Expense-Office Equipment

533Depreciation Expense-Tools

534Insurance Expense

535Supplies Expense

536Payroll Tax Expense

537Vacation Pay Expense

538Pension Expense

539Cash Short and Over

540Product Warranty Expense

541Miscellaneous Expense

710Interest Expense

720Litigation Loss