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P10-15A

Accounting, 9e
P10-15A	Journalizing liability transactions
LO 1, 2 [30-40 minutes]
		Students please fill-in areas that are shaded
Student Name
Course Name
Student ID:
Date:
The following transactions of Denver Pharmacies occurred during 2011 and 2012:
2011
Jan 9	Purchased computer equipment at a cost of $9,000, signing a six-month,
	6% note payable for that amount.
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.
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.
Jul 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.
31	Accrued interest on all outstanding notes payable. Make a separate
	interest accrual for each note payable.
2012
Feb 28	Paid the first installment and interest for one year on the four-year note
	payable.
29	Paid off the 9% note plus interest at maturity.
Requirements
1.	Journalize the transactions in Denver’s general journal. Explanations are not
	required.
Test Your Knowledge
P10-15A
Req. 1
Journal
DATE	ACCOUNTS AND EXPLANATIONS		DEBIT	CREDIT
2011
Jan 9
Jan 29	Cash ($64,000 X 1/4 X 1.06)		16,960
Feb 5
Feb 28
Jul 9
Aug 31
Dec 31
31
	Interest payable			- 0
31
2012
Feb 28
Feb 28

Student name here Date here