The following selected transactions of Truestar Communications, a Manitoba company, occurred during 2013 and 2014. The company's year-end is December 31.
2013
Jan. 3 Purchased a machine at a cost of $350,000 plus 5-percent GST, signing a 5-percent, six-month note payable for that amount.
29 Recorded the month's sales of $1,570,000 (excludes PST and GST), 80 percent on credit and 20 percent for cash. Sales amounts are subject to 7-percent PST and 5-percent GST.
Feb. 5 Paid January's PST and GST to the appropriate authorities.
28 Borrowed $3,000,000 on a 3-percent note payable that calls for annual installment payments of $300,000 principal plus interest.
Jul. 3 Paid the six-month, 5-percent note at maturity.
Nov. 30 Purchased inventory for $150,000 plus GST, signing a six-month, 5-percent note payable.
Dec. 31 Accrued warranty expense, which is estimated at 2 percent of annual sales of $8,000,000.
31 Accrued interest on all outstanding notes payable. Make a separate interest accrual entry for each note payable.
2014
Feb. 28 Paid the first installment and interest for one year on the long-term note payable.
May 31 Paid off the 5-percent note plus interest at maturity.
Required
Record the transactions in the company's general journal. Use days in any interest accrual calculations, not months. Round all amounts to the nearest whole dollar. Explanations are not required.