Liability Transactions

The following items were selected from among the transactions completed by Aston Martin Inc. during the current year:

Apr, $15.$ Borrowed $$225,000$ from Audi Company, issuing a $30-$day, $6\%$ note for that amount.

May $1.$ Purchased equipment by issuing a $$320,000,180-$day note to Spyder Manufacturing Co$.,$

which discounted the note at the rate of $6\%.$

Paid Audi Company the interest due on the note of April $15$ and renewed the loan by issuing

a new $60-$day, $8\%$ note for $$225,000.($Record both the debit and credit to the notes payable

account.$)$

July $14.$ Paid Audi Company the amount due on the note of May $15.$

Aug. $16.$ Purchased merchandise on account from Exige Co$.,$ $$90,000,$ terms, $\frac{n}{30}.$

Sept. $15.$ Issued a $45-$day, $6\%$ note for $$90,000$ to Exige Co$.,$ on account.

Oct. $28.$ Paid Spyder Manufacturing Co$.$ the amount due on the note of May $1,$

Paid Exige Co$.$ the amount owed on the note of September $15.$

Nov. $16.$ Purchased store equipment from Gallardo Co$.$ for $$450,000,$ paying $$50,000$ and issuing a

series of twenty $9\%$ notes for $$20,000$ each, coming due at $30-$day intervals.

Dec. $16.$ Paid the amount due Gallardo Co$.$ on the first note in the series issued on November $16.$

Settled a personal injury lawsuit with a customer for $$87,500,$ to be paid in January. Aston

Martin Inc. accrued the loss in a litigation claims payable account.

Required:

For a compound transaction, accounts should be listed largest to smallest.

For a compound transaction, accounts should be listed largest to smallest. For a compouriu uarisactivi, accuunts smuun ve usteu iar yest to smanest.

Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a $360-$day year.

Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:

Journalize the adjusting entry a$.$ Product warranty cost, $$26,800.$

b$.$ Interest on the $19$ remaining notes owed to Gallardo $Co$