The following transactions apply to Ozark Sales for Year 1:

1. The business was started when the company received $50,000 from the issue of common stock.
2. Purchased merchandise inventory of $380,000 on account.
3. Sold merchandise for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $330,000.
4. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales.
5. Paid the sales tax to the state agency on $400,000 of the sales.
6. On September 1, Year 1, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, Year 2.
7. Paid $6,200 for warranty repairs during the year.
8. Paid operating expenses of $78,000 for the year.
9. Paid $250,000 of accounts payable.
10. Recorded accrued interest on the note issued in transaction no. 6.

b1. Prepare the journal entries for the preceding transactions.

A. the business was started when the company received $50,000 from the issue of common stock. Record the transaction.

B. Purchased merchandise inventory of $380,000 on account. Record the transaction.

c .Sold merchandise for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. Record the transaction.

d. the merchandise sold had a cost of $330,000. Record the transaction.

E. Provided a six-month warranty on the merchandise sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales. Record the transaction.

f. Paid the sales tax to the state agency on $400,000 of the sales. Record the transaction.

g. On September 1, Year 1, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, Year 2. Record the transaction.

h. Paid $6,200 for warranty repairs during the year. Record the transaction.

i. Paid operating expenses of $78,000 for the year. Record the transaction.

J. Paid $250,000 of accounts payable. Record the transaction.

k Recorded accrued interest on the note issued in transaction number 6.

b2. Post the transaction to the appropriate T-accounts.