Reference no: EM131821364
Problem
1. Journalize the transactions in Denver's general journal.
2010
Jan 9 Purchased computer equipment at a cost of $7,000, signing a six-month, 8% note payable for that amount.
29 Recorded the week's sales of $62,000, three-fourths on credit, and one-fourth for cash. Sales amounts are subject to a 6% state sales tax.
Feb 5 Sent the last week's sales tax to the state.
28 Borrowed $202,000 on a four-year, 9% note payable that calls for $50,500 annual installment payments plus interest. Record the short-term and long-term portions of the note payable in two separate accounts.
July 9 Paid the six-month, 8% note, plus interest, at maturity.
Aug 31 Purchased inventory for $6,000, signing a six-month, 10% note payable.
Dec 31 Accrued warranty expense, which is estimated at 3% of sales of $605,000.
31 Accrued interest on all outstanding notes payable. Make a separate interest accrual for each note payable.
2011
Feb 28 Paid the first installment and interest for one year on the four-year note payable.
28 Paid off the 10% note plus interest at maturity.