The following items were selected from among the transactions completed by Sherwood Co. during the current year: Mar. 31 Apr. 30 1 Purchased merchandise on account from Kirkwood Co., $215,000, terms n/30. Issued a 30-day, 6% note for $215,000 to Kirkwood Co., on account. Paid Kirkwood Co the amount owed on the note of March 31. Borrowed $400,000 from Triple Creek Bank, issuing a 45-day, 8% note. Purchased tools by issuing a $60,000, 60-day note to Poulin Co., which discounted the note at the rate Jun. 1 Jul. 1 of 6% 16 Aug. 15 Dec Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 9% note for $400,000. (Journalize both the debit and credit to the notes payable account.) Pald Triple Creek Bank the amount due on the note of July 16. 30 Paid Poulin Co the amount due on the note of July 1 1 Purchased equipment from Greenwood Co. for $320,000, paying $120,000 cash and issuing a series of ten 6% notes for $20,000 each coming due at 30-day intervals. 22 Settled a product liability lawsuit with a customer for $50,000, payable in January, Accrued the loss in a litigation claims payable account Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. 31 Required: 1. Journalize the transactions. Assume a 360-day year. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year. a. Product warranty cost, $70,000. b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year. CHART OF ACCOUNTS Sherwood Co. General Ledger REVENUE 410 Sales 610 Interest Revenue ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Inventory 116 Supplies 118 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation Building 125 Office Equipment 126 Accumulated Depreciation Office Equipment EXPENSES 510 Cost of Goods Sold 520 Salaries Expense 524 Depreciation Expense-Building 525 Delivery Expense 526 Repairs Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Depreciation Expense-Tools 534 Insurance Expense 535 Supplies Expense 536 Payroll Tax Expense 537 Vacation Pay Expense 538 Pension Expense 127 Tools 128 Accumulated Depreciation-Tools LIABILITIES 210 Accounts Payable-Kirkwood Co. 211 Accounts Payable-Greenwood Co. 212 Accounts Payable-Poulin Co. 539 Cash Short and Over LIABILITIES 210 Accounts Payable-Kirkwood Co. 211 Accounts Payable-Greenwood Co. 212 Accounts Payable-Poulin Co. 213 Interest Payable 214 Notes Payable 215 Salaries Payable 216 Social Security Tax Payable 217 Medicare Tax Payable 218 Employees Federal Income Tax Payable 219 Employees State Income Tax Payable 220 Group Insurance Payable 221 Bond Deductions Payable 535 Supplies Expense 536 Payroll Tax Expense 537 Vacation Pay Expense 538 Pension Expense 539 Cash Short and Over 540 Product Warranty Expense 541 Miscellaneous Expense 710 Interest Expense 720 Litigation Loss 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 227 Unfunded Pension Liability 228 Product Warranty Payable 229 Litigation Claims Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends POST. REF. DATE DEBIT CREDIT ASSETS DESCRIPTION Mar. 1 Inventory Accounts Payable-Kirkwood Co. Mar. 31Accounts Payable-Kirkwood Co. Notes Payable Apr. 30 Notes Payable Interest Expense Cash 5 6 7 8 Jun1 Cash 9 10 11 12 13 14 Notes Payable Jul. 1Tools Interest Expense Notes Payable Jul 16 Notes Payable Interest Expense Notes Payable Cash Aug. 15 Notes Payable Interest Expense Cash 15 16 17 11 19 20 Aug, 30 Notes Payable 16 Cash 17 18 19 20 21 22 Aug. 15 Notes Payable Interest Expense Cash Aug. 30 Notes Payable Cash Dec. 1 Office Equipment Notes Payable Cash Dec. 22 Litigation Loss Litigation Claims Payable Dec. 31 Notes Payable Interest Expense 23 24 25 26 27 28 29 Cash 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: a. Product warranty cost $70,000. b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year. a General Journal Instructions How does grading work? JOURNAL Score: 28/51 DATE DESCRIPTION POST. REF DEBIT CREDIT 1 2 3 Adjusting Entries Product Warranty Expense Product Warranty Payable Interest Expense Interest Payable 4