Liability Transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Feb. 15. Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30. Mar. 17. Issued a 60-day, 7% note for $144,000 to Kirkwood Co., on account. May 16. Paid Kirkwood Co. the amount owed on the note of March 17. June 15. Borrowed $152,400 from Triple Creek Bank, issuing a 60-day, 8% note. July 21. Purchased tools by issuing a $99,000, 90-day note to Poulin Co., which discounted the note at the rate of 8%. Aug. 14. 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 $152,400. (Journalize both the debit and credit to the notes payable account.) Oct. 13. Paid Triple Creek Bank the amount due on the note of August 14. Oct. 19. Paid Poulin Co. the amount due on the note of July 21. Dec. 1. Purchased office equipment from Greenwood Co. for $96,000, paying $16,000 cash and issuing a series of ten 6% notes for $8,000 each, coming due at 30-day intervals. Dec. 12. Settled a product liability lawsuit with a customer for $66,000, payable in January. Accrued the loss in a litigation claims payable account. Dec. 31. 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. If required, round to one decimal place. Don't round the intermediate calculations. For a compound transaction, accounts should be listed largest to smallest. Date Account Debit Credit Feb. 15   fill in the blank 2 fill in the blank 3     fill in the blank 5 fill in the blank 6   Mar. 17   fill in the blank 8 fill in the blank 9     fill in the blank 11 fill in the blank 12   May 16   fill in the blank 14 fill in the blank 15     fill in the blank 17 fill in the blank 18     fill in the blank 20 fill in the blank 21   June 15   fill in the blank 23 fill in the blank 24     fill in the blank 26 fill in the blank 27   July 21   fill in the blank 29 fill in the blank 30     fill in the blank 32 fill in the blank 33     fill in the blank 35 fill in the blank 36   Aug. 14   fill in the blank 38 fill in the blank 39     fill in the blank 41 fill in the blank 42     fill in the blank 44 fill in the blank 45     fill in the blank 47 fill in the blank 48   Oct. 13   fill in the blank 50 fill in the blank 51     fill in the blank 53 fill in the blank 54     fill in the blank 56 fill in the blank 57   Oct. 19   fill in the blank 59 fill in the blank 60     fill in the blank 62 fill in the blank 63   Dec. 1   fill in the blank 65 fill in the blank 66     fill in the blank 68 fill in the blank 69     fill in the blank 71 fill in the blank 72   Dec. 12   fill in the blank 74 fill in the blank 75     fill in the blank 77 fill in the blank 78   Dec. 31   fill in the blank 80 fill in the blank 81     fill in the blank 83 fill in the blank 84     fill in the blank 86 fill in the blank 87 2.  Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $19,000; (b) interest on the nine remaining notes owed to Greenwood Co. Item Account Debit Credit a.   fill in the blank 89 fill in the blank 90     fill in the blank 92 fill in the blank 93   b.   fill in the blank 95 fill in the blank 96     fill in the blank 98 fill in the blank 99

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 14RE: On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank....
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  1. Liability Transactions

    The following items were selected from among the transactions completed by Sherwood Co. during the current year:


    Feb. 15. Purchased merchandise on account from Kirkwood Co., $144,000, terms n/30.
    Mar. 17. Issued a 60-day, 7% note for $144,000 to Kirkwood Co., on account.
    May 16. Paid Kirkwood Co. the amount owed on the note of March 17.
    June 15. Borrowed $152,400 from Triple Creek Bank, issuing a 60-day, 8% note.
    July 21. Purchased tools by issuing a $99,000, 90-day note to Poulin Co., which discounted the note at the rate of 8%.
    Aug. 14. 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 $152,400. (Journalize both the debit and credit to the notes payable account.)
    Oct. 13. Paid Triple Creek Bank the amount due on the note of August 14.
    Oct. 19. Paid Poulin Co. the amount due on the note of July 21.
    Dec. 1. Purchased office equipment from Greenwood Co. for $96,000, paying $16,000 cash and issuing a series of ten 6% notes for $8,000 each, coming due at 30-day intervals.
    Dec. 12. Settled a product liability lawsuit with a customer for $66,000, payable in January. Accrued the loss in a litigation claims payable account.
    Dec. 31. 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. If required, round to one decimal place. Don't round the intermediate calculations.

    For a compound transaction, accounts should be listed largest to smallest.

    Date Account Debit Credit
    Feb. 15   fill in the blank 2 fill in the blank 3
        fill in the blank 5 fill in the blank 6
     
    Mar. 17   fill in the blank 8 fill in the blank 9
        fill in the blank 11 fill in the blank 12
     
    May 16   fill in the blank 14 fill in the blank 15
        fill in the blank 17 fill in the blank 18
        fill in the blank 20 fill in the blank 21
     
    June 15   fill in the blank 23 fill in the blank 24
        fill in the blank 26 fill in the blank 27
     
    July 21   fill in the blank 29 fill in the blank 30
        fill in the blank 32 fill in the blank 33
        fill in the blank 35 fill in the blank 36
     
    Aug. 14   fill in the blank 38 fill in the blank 39
        fill in the blank 41 fill in the blank 42
        fill in the blank 44 fill in the blank 45
        fill in the blank 47 fill in the blank 48
     
    Oct. 13   fill in the blank 50 fill in the blank 51
        fill in the blank 53 fill in the blank 54
        fill in the blank 56 fill in the blank 57
     
    Oct. 19   fill in the blank 59 fill in the blank 60
        fill in the blank 62 fill in the blank 63
     
    Dec. 1   fill in the blank 65 fill in the blank 66
        fill in the blank 68 fill in the blank 69
        fill in the blank 71 fill in the blank 72
     
    Dec. 12   fill in the blank 74 fill in the blank 75
        fill in the blank 77 fill in the blank 78
     
    Dec. 31   fill in the blank 80 fill in the blank 81
        fill in the blank 83 fill in the blank 84
        fill in the blank 86 fill in the blank 87

    2.  Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: (a) product warranty cost, $19,000; (b) interest on the nine remaining notes owed to Greenwood Co.

    Item Account Debit Credit
    a.   fill in the blank 89 fill in the blank 90
        fill in the blank 92 fill in the blank 93
     
    b.   fill in the blank 95 fill in the blank 96
        fill in the blank 98 fill in the blank 99
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