Question

III. Short Term Liabilities. The following transactions of Scooter Inc. occurred during 2018 and 2019. 2018 Marl. Purchased inventory for $65,000, signing a six month, 8% note payable. May 31. Borrowed $105,000 on a 6% one-year note payable. Sep 3. Paid the 8% note payable at maturity. Dec 31. Accrued warranty expense, which is estimated at 1.5% of sales of $193,000. Dec 31. Accrued interest on the 6% note payable. 2019 May 31. Paid the outstanding note payable at maturity. REQUIRED: Journalize all the above transactions.

Answer 1

Date	General Journal	Debit	Credit
Mar 1	Inventory	$65,000	-
	Note payable	-	$65,000
	(To record inventory purchase on credit)
May 31	Cash	$105,000	-
	Note payable	-	$105,000
	(To record cash borrowed)
Sep 3	Note payable	$65,000	-
	Interest expense	$2,600	-
	Cash	-	$67,600
	(To record payment of note payable)
Dec 31	Warranty expense (1.5% X $193,000)	$2,895	-
	Accrued warranty liability	-	$2,895
	(To record warranty expense)
Dec 31	Interest expense ($105,000 X 6% X 7/12)	$3,675	-
	Interest payable	-	$3,675
	(To record interest expense accrued)
May 31	Note payable	$105,000	-
	Interest expense	$2,625	-
	Interest payable	$3,675	-
	Cash	-	$111,300
	(To record repayment of note payable)