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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%.
	15	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.)
Jul.	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, n/30.
Sep.	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.
	30	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.
	28	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:
1.	Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.
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 for exact wording of account titles): A. Product warranty cost, $26,800. B. Interest on the 19 remaining notes owed to Gallardo Co. Assume a 360-day year.

Chart of Accounts

CHART OF ACCOUNTS
Aston Martin Inc.
General Ledger
ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Merchandise Inventory 116 Supplies 118 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Store Equipment 126 Accumulated Depreciation-Store Equipment 127 Equipment 128 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable-Exige Co. 211 Accounts Payable-Gallardo Co. 212 Accounts Payable-Spyder Manufacturing Co. 213 Interest Payable 214 Notes Payable 215 Salaries Payable 216 Social Security Tax Payable 217 Medicare Tax Payable 218 Employees Federal Income Tax Payable 219 Employees State Income Tax Payable 220 Group Insurance Payable 221 Bond Deductions Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 227 Unfunded Pension Liability 228 Product Warranty Payable 229 Litigation Claims Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 524 Depreciation Expense-Building 525 Delivery Expense 526 Repairs Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Store Equipment 533 Depreciation Expense-Equipment 534 Insurance Expense 535 Supplies Expense 536 Payroll Tax Expense 537 Vacation Pay Expense 538 Pension Expense 539 Cash Short and Over 540 Product Warranty Expense 541 Miscellaneous Expense 710 Interest Expense 720 Litigation Loss

Journal

1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Scroll down to access page 12 of the journal for the adjusting entries.

PAGE 11

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
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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 for exact wording of account titles): A. Product warranty cost, $26,800. B. Interest on the 19 remaining notes owed to Gallardo Co. Assume a 360-day year.

PAGE 12

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1		Adjusting Entries
2
3
4
5

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