(Learning Objective 1: Recording liability related transactions) The following transactions of Smooth Sounds Music Company occurred during 20X5 and 20X6:
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20X5 |
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Mar. 3 |
Purchased a Steinway piano (inventory) for $40,000, signing a 6 month, 8% note payable. |
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Apr. 30 |
Borrowed $50,000 on a 9% note payable that calls for annual installment payments of $25,000 principal plus interest. Record the short term note payable in a separate account from the long term note payable. |
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Sept. 3 |
Paid the 6 month, 8% note at maturity. |
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Dec. 31 |
Accrued warranty expense, which is estimated at 2% of sales of $190,000. |
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31 |
Accrued interest on the outstanding note payable. |
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20X6 |
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Apr. 30 |
Paid the first installment plus interest for 1 year on the outstanding note payable. |
Required
Record the transactions in Smooth Sounds’ journal. Explanations are not required.