Question

Transactions 2017 Mar. Apr. 3 Purchased a Steinway piano (inventory) for $41,500, signing a six-month, 10% note. 30 Borrowed $50,000 on a 15% 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. 3 Paid the six-month, 10% note at maturity. 31 Accrued warranty expense, which is estimated at 5.5% of sales of $196,000. 31 Accrued interest on the outstanding note payable. Sept. Dec. 2018 Apr. 30 Paid the first installment plus interest for one year on the outstanding note payable. Print Print Done Done

Answer 1

	Journal Entries
	Sr. No.	Date	Account Title and explanation	Debit	Credit
	1	March 03, 2017	Inventory	$                    41,500
			10% Note Payable		$                      41,500
			Cash	$                    50,000
	2	Apil 30. 2017	15% Note Payable		$                      50,000
	3	September 03, 2017	10% Note Payable	$                    41,500
			Interest Expenses ($ 41,500 X 10% X 6 / 12 Month)	$                       2,075
			Cash		$                      43,575
	4	December 31, 2017	Warranty Expenses ($ 196,000 X 5.5 % )	$                    10,780
			Estimated of Warranty Liabilities		$                      10,780
	5	December 31, 2017	Interest Expenses ($ 50,000 X 15% X 8 / 12 Month)	$                       5,000
			Interest Payable		$                        5,000
			Interest Payable	$                       5,000
	6	April 30, 2018	Interest Expenses ($ 50,000 X 15% X 4 / 12 Month)	$                       2,500
			15% Note Payable	$                    25,000
			Cash		$32,500