The following items were selected from among the transactions completed by Wiggins Manufacturing during the current year:

Apr. 7 Borrowed $30,000 from First Financial Corporation, issuing a 60-day, 12% note for that amount.

May 10 Purchased equipment by issuing a $90,000, 120-day note to Brown Equipment Co., which discounted the note at the rate of 10%.

June 6 Paid First Financial Corporation the interest due on the note of April 7 and renewed the loan by issuing a new 30-day, 16% note for $30,000. (Record both the debit and credit to the notes payable account.)

July 6 Paid First Financial Corporation the amount due on the note of June 6.

Aug. 3 Purchased merchandise on account from Webb Co., $48,000, terms, n/30.

Sept. 2 Issued a 60-day, 15% note for $48,000 to Webb Co., on account.

7 Paid Brown Equipment Co. the amount due on the note of May 10.

Nov. 1Paid Webb Co. the amount owed on the note of September 2.

15 Purchased store equipment from Shingo Equipment Co. for $150,000, paying $62,000 and issuing a series of eight 12% notes for $11,000 each, coming due at 30-day intervals.

Dec. 15 Paid the amount due Shingo Equipment Co. on the first note in the series issued on November 15.

21 Settled a product liability lawsuit with a customer for $83,000, to be paid in January. Wiggins Manufacturing accrued the loss in a litigation claims payable account.

Instructions

1. Record the transactions.

2. Record the adjusting entry for each of the following accrued expenses at the end of the current year:

a. Product warranty cost, $16,800.

b. Interest on the seven remaining notes owed to Shingo Equipment Co.