Question

1) Carpenter Inc. estimates warranty expense at 4% of sales. Sales during the year were $8 million and warranty expenditures were $47,000. What was the balance in the Warranty Liability account at the end of the year?

2)On November 1, Vacation Destinations borrows $1.58 million and issues a six-month, 8% note payable. Interest is payable at maturity. Record the issuance of the note and the appropriate adjusting entry for interest expense at December 31, the end of the reporting period. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Enter your answers in dollars, not in millions. Round your answers to the nearest dollar amount.)

3)On September 1, 2021, Allied Moving Corp. borrows $110,000 cash from First National Bank. Allied signs a six-month, 6% note payable. Interest is payable at maturity. Allied's year-end is December 31.

1., 2. & 3. Record the following transactions for the note payable by Allied Moving Corp. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to nearest dollar amount.)
  

4)On November 1, 2021, Dual Systems borrows $150,000 to expand operations. Dual Systems signs a six-month, 9% promissory note. Interest is payable at maturity. Dual System's year-end is December 31.  

1., 2. & 3. Record the following transactions for the note payable by Dual Systems. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)
  

Answer 1

1	Balnace in Warranty Liability Account in the end of year = Warranty Liability - Warranty expenditure
			= ( $ 8,000,000 * 4% ) - $ 47,000
			= $ 320,000 - $ 47,000
			= $ 273,000
2	Journal entry
Date	Title	Debit	Credit
Nov-01	Cash	$ 1,580,000
	Notes Payable		$ 1,580,000
	( Being Cash Received )
Dec-31	Interest Expenses	$ 21,067
	Interest Payable		$ 21,067
	( Being Interest Accrued )
	( $ 1,580,000 * 8% )*2/12
3	Journal entry
Date	Title	Debit	Credit
Sep-01	Cash	$ 110,000
	Notes Payable		$ 110,000
	( Issuance of Notes Payable )
Dec-31	Interest Expenses	$ 2,200
	Interest Payable		$ 2,200
	( $ 110,000*6%)*4/12
Mar-01	Notes Payable	$ 110,000
	Interest Expenses	$ 1,100
	Interest Payable	$ 2,200
	Cash		$ 1,13,300
	( Notes payable and interest paid )
4
Date	Title	Debit	Credit
Nov-01	Cash	$ 150,000
	Notes Payable		$ 150,000
	( Issuance of Notes Payable )
Dec-31	Interest Expenses	$ 2,250
	Interest Payable		$ 2,250
	( $ 150,000*9%)*2/12
Apr-30	Notes Payable	$ 150,000
	Interest Expenses	$ 2,250
	Interest Payable	$ 4,500
	Cash		$ 1,56,750
	( Notes payable and interest paid )