The following transactions of Handy Andy’s stores occurred during 2012 and 2013:2012Feb 3 Purchased equipment for $10,000, signing a six-month, 11% note payable.28 Recorded the week’s sales of $48,000, one-third for cash, and two-thirds on account. All sales amounts are subject to a 7% sales tax. Ignore cost of goods sold.Mar 7 Sent last week’s sales tax to the state.Apr 30 Borrowed $120,000 on a four-year, 6% note payable that calls for annualpayment of interest each April 30.Aug 3 Paid the six-month, 11% note at maturity.Nov 30 Purchased inventory at a cost of $6,000, signing a three-month, 5% note payablefor that amount.Dec 31 Accrued warranty expense, which is estimated at 6% of total sales of $580,000.31 Accrued interest on all outstanding notes payable. Accrued interest for each note separately.2013Feb 28 Paid off the 5% note, plus interest, at maturity. Paid the interest for one year on Apr 30 the long-term note payable.Requirement1. Record the transactions in the company’s journal. Explanations are not required.View Solution:
The following transactions of Handy Andy s stores occurred during 2012