The following transactions of Denver Pharmacies occurred during 2011 and 2012.
Jan 9 Purchased computer equipment at a cost of $9,000, signing a six-month, 6% note payable for that amount.
Jan 29 Recorded the week s sales of $64,000, 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.
Feb 28 Borrowed $204,000 on a four-year, 10% note payable that calls for $51,000 annual installment payments plus interest. Record the current and long-term portions of the note payable in two separate accounts.
July 9 Paid the six-month, 6% note, plus interest, at maturity.
Aug 31 Purchased inventory for $12,000, signing a six-month, 9% note payable.
Dec 31 Accrued warranty expense, which is estimated at 2% of sales of $603,000.
Dec 31 Accrued interest on all outstanding notes payable. Make a separate interest accrual of reach note payable.
Feb 28 Paid the first installment and interest for one year on the four-year note payable.
Feb 29 Paid off the 9% note plus interest at maturity.