1. The following selected transactions relate to liabilities of Fairfox Inc., for portions of 2021. Fairfoxs fiscal year ends on December 31.

2021

a. April 1 Arranged a short-term line of credit with Belize Bank amounting to $20,000,000 at the banks prime rate of 12%. The company will pay no commitment fees for this arrangement.

2. July 5 Received a $75,000 refundable deposit from a major customer for mailing containers used to transport the companys equipment.

3. Oct. 17 Received most of the mailing containers covered by the refundable deposit and a letter stating that the customer will retain containers represented by $12,000 of the deposit and therefore does not request a refund for that amount. The cost of the forfeited containers was $4,500.

4. Aug. 1 Borrowed $7 million cash from Belize Bank under the line of credit arranged in March and issued a ten-month promissory note. Interest at the prime rate of 12% was payable at maturity.

5. Dec. 31 Recorded appropriate adjusting entries for the liabilities described above.

Required:

Prepare the appropriate journal entries for the transactions listed above. Please show all computation for each journal. (20 pts)