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NOWv2| Online X ow.com/ilm/takeAssignment/takeAssignment Main do?invoker assignments&take;ÄssignmentSessionLocator Main.do?invoker- assignments&takeAssignmentSessionLocator; assignment-tal Book Show Me How Calculator Liability Transactions The following items were selected from among the transactions completed by Emerald Bay Stores o. during the aurrent years Feb. 15. Purchased merchandise on account from Hood Co., $144,000, terms n/30. Mar. 17, issued a 60-day, 7% note for $144,000 to Hood Co., on account. May 16. Paid Hood Co. the amount owed on the note of March 17. June 15. Borrowed $140,400 from Acme Bank, issuing a 60-day, 8% note. July 21. Purchased tools by issuing a $87,000, 90-day note to Columbia Supply Co., which discounted the note at the rate of 7%. Aug. 14. Paid Acme Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $140,400, (Journalize both the debit and credit to the notes payable account.) Oct. 15. Paid Acme Bank the amount due on the note of August 14 Oct. 19. Paid Columbia Supply Co. the amount due on the note of July 21 Dec. 1. Purchased office equipment from Mountain Equipment Co. for $120,000, paying $20,000 and issuing a seres often 6% notes for $10,000 each, coming due at 30-day intervals. Settled a product liability lawsuit with a customer for $70,000, payable in January. Emerald 0ec 12 Bay accrued the loss in a litigation claims payable account. Dec. 31. December 1 Paid the amount due Mountain Equipment Co, on the first note in the series issued on Required: 1. Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a 360-day year. If required, roun Check My Work 3 more Check My Work uses remaining All work saved. 0 waExplanation / Answer
Debit Credit 15-Feb Merchandise Inventory 1,44,000 Accounts Payable - Hood & Co. 1,44,000 17-Mar Accounts Payable - Hood & Co. 1,44,000 Notes Payable - Hood & Co. 1,44,000 16-May Interest Expense 2,520 Interest Payable 2,520 (90/360 X 7% X 144,000) 16-May Notes Payable - Hood & Co. 1,44,000 Interest Payable 2,520 To Cash 1,46,520 15-Jun Cash 1,40,400 Notes Payable - Acme Bank - 8% 1,40,400 21-Jul Tools 87,000 Notes Payable - Colombia Supply 87,000 (The Vendor discounting the note does not affect the entry in the client books. The Liability of the client remains the same.) 14-Aug Interest Expense 1,872 Interest Payable 1,872 (60/360 X 8% X 140,400) 14-Aug Interest Payable 1,872 Cash 1,872 14-Aug Notes Payable - Acme Bank - 8% 1,40,400 Notes Payable - Acme Bank - 10% 1,40,400 15-Oct Interest Expense 2,340 Interest Payable 2,340 (60/360 X 10% X 140,400) 15-Oct Interest Payable 2,340 Notes Payable - Acme Bank - 10% 1,40,400 Cash 1,42,740 19-Oct Notes Payable - Colombia Supply 87,000 Cash 87,000 (Since interest rate on the note is not mentioned, it is assumed no interest is paid) 01-Dec Office Equipment 1,20,000 Cash 20,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 Notes Payable - Mountain Equipment Co. 10,000 12-Dec Litigations Claim Payable 70,000 Cash 70,000 31-Dec Interest Expense 50 Interest Payable 50 (30/360 X 6% X 10,000) 31-Dec Interest Payable 50 Notes Payable - Mountain Equipment Co. 10,000 Cash 10,050 Closing Entries Product Warrant Cost 31-Dec Warranty Cost 19,300 Warranty Claims Payable 19,300 Interest on 9 Remaining Notes for 30 Days 31-Dec Interest Expense 450 Interest Payable 450
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