Liability transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Date Feb. 15. Mar. 17. May 16. June 15. July 21. Aug. 14. Oct. 13. Transaction Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30. Dec. 31. Issued a 60-day, 7% note for $144,000 to Kirkwood Co., on account. Paid Kirkwood Co. the amount owed on the note of March 17. Borrowed $163,200 from Triple Creek Bank, issuing a 60-day, 8% note. Purchased tools by issuing a $78,000, 90-day note to Poulin Co., which discounted the note at the rate of 6%. Paid Triple Creek Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $163,200. (Journalize both the debit and credit to the notes payable account.) Paid Triple Creek Bank the amount due on the note of August 14. Oct. Paid Poulin Co. the amount due on the note of July 21. 19. Dec. 1. Purchased equipment from Greenwood Co. for $144,000, paying $24,000 cash and issuing a series of ten 6% notes for $12,000 each, coming due at 30-day intervals. Dec. Settled a product liability lawsuit with a customer for $79,000, payable in January. Accrued the loss in a litigation 12. claims payable account. Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. Required: 1. Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a 360-day year. Do not round intermediate calculations. When required, round your final answers to one decimal places. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $15,900; (b) interest on the nine remaining notes owed to Greenwood Co.
Liability transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Date Feb. 15. Mar. 17. May 16. June 15. July 21. Aug. 14. Oct. 13. Transaction Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30. Dec. 31. Issued a 60-day, 7% note for $144,000 to Kirkwood Co., on account. Paid Kirkwood Co. the amount owed on the note of March 17. Borrowed $163,200 from Triple Creek Bank, issuing a 60-day, 8% note. Purchased tools by issuing a $78,000, 90-day note to Poulin Co., which discounted the note at the rate of 6%. Paid Triple Creek Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $163,200. (Journalize both the debit and credit to the notes payable account.) Paid Triple Creek Bank the amount due on the note of August 14. Oct. Paid Poulin Co. the amount due on the note of July 21. 19. Dec. 1. Purchased equipment from Greenwood Co. for $144,000, paying $24,000 cash and issuing a series of ten 6% notes for $12,000 each, coming due at 30-day intervals. Dec. Settled a product liability lawsuit with a customer for $79,000, payable in January. Accrued the loss in a litigation 12. claims payable account. Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. Required: 1. Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a 360-day year. Do not round intermediate calculations. When required, round your final answers to one decimal places. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $15,900; (b) interest on the nine remaining notes owed to Greenwood Co.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Liability transactions
The following items were selected from among the transactions completed by Sherwood Co. during the current year:
Date
Feb.
15.
Mar.
17.
May
16.
June
15.
July
21.
Aug.
14.
Oct.
13.
Transaction
Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30.
Issued a 60-day, 7% note for $144,000 to Kirkwood Co., on account.
Paid Kirkwood Co. the amount owed on the note of March 17.
Borrowed $163,200 from Triple Creek Bank, issuing a 60-day, 8% note.
Purchased tools by issuing a $78,000, 90-day note to Poulin Co., which discounted the note at the rate of 6%.
Paid Triple Creek Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day,
10% note for $163,200. (Journalize both the debit and credit to the notes payable account.)
Paid Triple Creek Bank the amount due on the note of August 14.
Oct.
Paid Poulin Co. the amount due on the note of July 21.
19.
Dec. 1.
Purchased equipment from Greenwood Co. for $144,000, paying $24,000 cash and issuing a series of ten 6%
notes for $12,000 each, coming due at 30-day intervals.
Dec. Settled a product liability lawsuit with a customer for $79,000, payable in January. Accrued the loss in a litigation
12.
claims payable account.
Paid the amount due to Greenwood Co. on the first note in the series issued on December 1.
Dec.
31.
Required:
1. Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a 360-day year. Do not
round intermediate calculations. When required, round your final answers to one decimal places.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product
warranty cost, $15,900; (b) interest on the nine remaining notes owed to Greenwood Co.
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