### Instructions**March**1. Purchased merchandise on account from Kirkwood Co. for $372,000, with terms n/30.2. Issued a 30-day, 4% note for $372,000 to Kirkwood Co. on account.**April**1. Paid Kirkwood Co. the amount owed on the note of March 31.**June**1. Borrowed $150,000 from Triple Creek Bank by issuing a 45-day, 8% note.**July**1. Purchased tools by issuing a $276,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%.2. Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6.5% note for $150,000. (Journalize both the debit and credit to the notes payable account.)**August**1. Paid Triple Creek Bank the amount due on the note of July 16.2. Paid Poulin Co. the amount due on the note of July 1.**December**1. Purchased equipment from Greenwood Co. for $540,000, paying $108,000 in cash and issuing a series of ten 4% notes for $43,200 each, coming due at 30-day intervals.2. Settled a product liability lawsuit with a customer for $309,500, payable in January. Accrued the loss in a litigation claims payable account.3. Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. ### Required:1. **Journalize the transactions:** Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to the nearest dollar.2. **Journalize the adjusting entry for each of the following accrued expenses at the end of the current year** (refer to the Chart of Accounts for exact wording of account titles): - **a. Product warranty cost, $28,000.** - **b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.**This exercise involves recording financial transactions and adjustments in the journal, which is a fundamental part of accounting practices. The given scenarios necessitate familiarity with the Chart of Accounts to ensure accuracy in the documentation process. For part 2, specifically:- **Product warranty cost** involves recording a liability for potential future expenses related to product warranties.- **Interest on notes** requires calculating the interest expense accrued on outstanding notes payable, considering a 360-day year basis, which is a common practice for simplifying interest calculations.Ensure to use precise account titles as listed in the organization's Chart of Accounts to maintain consistency and accuracy in financial reporting.

1) Journal Entry Date Particulars Debit Credit Mar 1 Inventory 372,000 Accounts…

Mar. Purchased merchandise on account from Kirkwood Co., $372,000, terms n/30. 31 Issued a 30-day, 4% note for $372,000 to Kirkwood Co., on account. Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31. Jun. Borrowed $150,000 from Triple Creek Bank, issuing a 45-day, 8% note. Jul. Purchased tools by issuing a $276,000, 60-day note to Poulin Co., which discounted the not rate of 6%. 16 Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issui 30-day, 6.5% note for $150,000. (Journalize both the debit and credit to the notes payable ac Aug. 15 Paid Triple Creek Bank the amount due on the note of July 16. 30 Paid Poulin Co. the amount due on the note of July 1. Dec. 1 Purchased equipment from Greenwood Co. for $540,000, paying $108,000 cash and issuing ten 4% notes for $43,200 each, coming due at 30-day intervals. 22 Settled a product liability lawsuit with a customer for $309,500, payable in January. Accrued t a litigation claims payable account. 31 Paid the amount due to Greenwood Co. on the first note in the series issued on December 1.

Mar. Purchased merchandise on account from Kirkwood Co., $372,000, terms n/30. 31 Issued a 30-day, 4% note for $372,000 to Kirkwood Co., on account. Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31. Jun. Borrowed $150,000 from Triple Creek Bank, issuing a 45-day, 8% note. Jul. Purchased tools by issuing a $276,000, 60-day note to Poulin Co., which discounted the not rate of 6%. 16 Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issui 30-day, 6.5% note for $150,000. (Journalize both the debit and credit to the notes payable ac Aug. 15 Paid Triple Creek Bank the amount due on the note of July 16. 30 Paid Poulin Co. the amount due on the note of July 1. Dec. 1 Purchased equipment from Greenwood Co. for $540,000, paying $108,000 cash and issuing ten 4% notes for $43,200 each, coming due at 30-day intervals. 22 Settled a product liability lawsuit with a customer for $309,500, payable in January. Accrued t a litigation claims payable account. 31 Paid the amount due to Greenwood Co. on the first note in the series issued on December 1.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following items were selected from among the transactions completed by Sherwood Co. during the current year: Mar. 1 Purchased merchandise on account from Kirkwood Co., $225,000, terms n/30. 31 Issued a 30-day, 8% note for $225,000 to Kirkwood Co., on account. Apr. 30 Paid Kirkwood Co. the amount owed on the note of March 31. Jun. 1 Borrowed $600,000 from Triple Creek Bank, issuing a 45-day, 6% note. Jul. 1 Purchased tools by issuing a $50,000, 60-day note to Poulin Co., which discounted the note at the rate of 6%. 16 Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 7% note for $600,000. (Journalize both the debit and credit to the notes payable account.) Aug. 15 Paid Triple Creek Bank the amount due on the note of July 16. 30 Paid Poulin Co. the amount due on the note of July 1. Dec. 1 Purchased equipment from Greenwood Co. for $280,000, paying $80,000 cash and issuing a series of ten 9% notes for…
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