The following transactions apply to Ozark Sales for Year 1:

1. The business was started when the company received $48,000 from the issue of common stock.
2. Purchased merchandise inventory of $176,500 on account.
3. Sold merchandise for $192,000 cash (not including sales tax). Sales tax of 6 percent is collected when the merchandise is sold. The merchandise had a cost of $117,000.
4. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales.
5. Paid the sales tax to the state agency on $142,000 of the sales.
6. On September 1, Year 1, borrowed $22,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2.
7. Paid $5,400 for warranty repairs during the year.
8. Paid operating expenses of $52,500 for the year.
9. Paid $124,300 of accounts payable.
10. Recorded accrued interest on the note issued in transaction number 6.

Part A: Prepare the journal entries for the preceding transactions.

Part B: Post the transaction to the appropriate T-accounts.

Part A pictured below:

Part B pictured below:

Journal entry worksheet The business was started when the company received $48,000 from the issue of common stock. Record the transaction. Note: Enter debits before credits