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12. Comfort realty had the following selected transactions: Feb 1 signs a $50,0000, 6-month, 9% interest-bearing...

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Accounting

12. Comfort realty had the following selected transactions: Feb1 signs a $50,0000, 6-month, 9% interest-bearing note payable toCitibank and receives $50,000 in cash, cash register sales total$43,200, which includes an 8% sales tax the payroll for the monthconsists of sales salaries $32,000 and office salaries $18,000. Allwages are subject to 8% FICA taxes. A total of $8,900 federalincome taxes are withheld. The salaries are paid on March 1 28 thecompany develops the following adjustment data 1) Interest expenseof $375 has been incurred on the note 2) Employer payroll taxesinclude 8% FICA taxes, a 5.4% state unemployment tax, and a 0.8%federal unemployment tax 3) Some sales were made under warranty. Ofthe units sold under warranty, 350 are expected to becomedefective. Repair costs are estimated to be 40% per unit a.Journalize the February transactions b. Journalize the adjustingentries at February 28

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Date Account Debit Credit
Feb.1 Cash      50,000
Note payable      50,000
Cash      43,200
Sales revenue      40,000
Sales tax payable        3,200
Salaries expense      50,000
Salaries payable      37,100
FICA payable        4,000
Federal income tax payable        8,900
Adj. 1 Interest expense           375
Interest payable           375
Adj.2 Payroll tax expense        7,100
FICA taxes payable        4,000
State unemployment tax payable        2,700
Federal unemployment tax payable           400

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