Question

make neat and clear use chart account list for description. label amounts debit or credit for Journal entries. Only 4 adjusting journal entries

The following items were selected from among the transactions completed by O'Donnel Co. during the current year Jan. 10. 11. Purchased merchandise on account from Laine Co. $240.000. terms 1/30. Issued a 30 day. 4% note for $240,000 to Laine Co., on account. Paid Laine Co. the amount owed on the note of February Borrowed 5160,000 from Tabata Bank, issuing a 45-day, 5% note. Purchased tools by issuing a $180,000, 60-day note to Gibala Co., which discounted the note at the rate of 5%. Paid Tabata Bank the interest due on the note of May 1 and renewed the loan by issuing a new 45-day. 7% note for $160,000. (Journalize both the debit and credit to the notes payable account.) Paid Tabata Bank the amount due on the note of June 15. Paid Gibala Co the amount due on the note of June 1 Purchased office equipment from Warick Co. for $400.000, paying $100.000 and issuing a series of ter 5% notes for $30.000 each coming due at 30-day intervals. Settled a product liability wsuit with a customer for $200,000 payable in January O Donnel accrued the loss in a litigation claims payable account Paid the amount due Warick Co on the first note in the senes issued on December 1 July 30. 30. 1. Dec 31. Required: 1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year 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 forrad wording of account title A Product warranty cost $23 000 . Interest on the nine remaining notes owe to Wanick Co Abune a 360-day

Answer 1

Below is the spreadsheet showing Journal entries: -

B C Debit ($) 240,000 D Credit (S) 240.000 А 1 Date Accounts title and Explanations 2 Jan.10 Inventory 3 Accounts Payable-Laine Co. 4 5 Feb.9 Accounts Payable-Laine Co. Notes Payable 7 8 Mar. 11 Notes Payable Interest Expense 10 Cash 240,000 6 240.000 240.000 800 ($240,000*30/360*4%) 240.800 11 160.000 12 May. 1 13 Cash Notes Payable 160,000 15 Jun. 1 Tools Interest Expense Notes Payable 178,500 1,500 16 ($180,000*60/360*5%) 180.000 19 Jun. 15 160,000 1,000 ($160,000*45/360*5%) Notes Payable Interest Expense Notes Payable Cash 160,000 1.000 24 Jul. 30 160,000 25 Notes Payable Interest Expense Cash 1,400 ($160,000*45/360*7%) 26 161,400

B D 180.000 А 28 Jul. 30 29 30 31 Dec.1 Notes Payable Cash 180,000 400,000 Office Equipment Notes Payable Cash 300,000 100.000 33 34 35 Dec. 15 260.000 Litigation Loss Litigation Claims Payable 36 260.000 37 38 Dec.31 39 40 Notes payable Interest Expense Cash 30,000 125 ($30,000*30/360*5%) 30.125 41 42 (B) 43 S.No. 44 a Credit ($) Accounts title and Explanations Product warranty expense Product warranty payable Debit ($) 23.000 45 23,000 46 47 48 1.125 Interest Expense Interest Payable 1,125 ($30,000*9*30/360*5%)