The following items were selected from among the transactions completed by Paulson INC. during the current year. Apr. 1. Borrowed $60,000from McCaw Company, issuing a 45-day, 6% note for that amount. Apr 26. Purchased equipment by issuing a $160,000, 180-day note to Houston manufacturing Co., which discounted the note at the rate of 8%. May 16. Paid McCaw Company the interest due on the note of April 1 and renewing the loan by issuing a new 30-day, 10% note for $60,000. (Record both the debit and credit to the notes payable account.) June 15. Paid McCaw Company the amount due on the note of may 16. Sept 3. Purchase merchandise on account from Oatley Co., $42,000, terms, n/30 Oct 3. Issued a 30-day, 9% note for $42,000, to Oatley Co. on account Oct 23. Paid Houston manufacturing Co. the amount due on the note of april 26. Nov 2. Paid Oatley Co. the amount owed on the note of October 3. Nov 10. Purchased store equipment from Biden technology Co. for $200,000, paying $60,000 and issuing a series of seven 9% notes for $20,000each, coming due at 30-day intervals. Dec. 10. Paid the amount due Biden Technology Co. on the first note in the series issued on November 10. Dec 16. Settled a personal injury lawsuit with a customer for $42,500, to be paid in January. Paulson INC. accrued the loss in a litigation claims payable account. Instructions 1. Journalize the transactions 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year. 1. Product warranty cost, $10,400 2. Interest on the six remaining notes owed to Biden Technology Company The following transactions, adjusting entries, and closing entries were completed by Trail Creek Furniture Co. during a three year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. 2008 Jan. 6. Purchased a used delivery truck for $24,000, paying cash. July 19. Paid Garage $500 for miscellaneous repairs to the truck. Dec. 31. Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $4,000 for the truck. 2009 Jan 2. Purchased a new truck for $69,000, paying cash. Aug 1. Sold the used truck for $10,250. (Record the depreciation to date in 2009 for the truck) Oct 24. Paid garage $415 for miscellaneous repairs to the truck. Dec 31. Record depreciation for the new truck. It has an estimated residual value of $15,000 and an estimated life of five years. 2010 July 1. Purchased a new truck for $70,000, paying cash. Oct 1. Sold the truck purchased January 2, 2009, for $25,000. (Record depreciation for the year) Dec 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $18,000 and an estimated useful life of eight years. Instructions Journalize the transactions and the adjusting entries. Porto Bay Corporations manufactures and distributes leisure clothing. Selected transactions completed by Porto Bay during the current fiscal year are follows: Jan 10. Split the common stock 4 for 1 and reduced the par from $100 to $25 per share. After the split, there were 500,000 common shares outstanding. Mar 1. Declared semiannual dividends of $1.20 on 80,000 shares of preferred stock and $0.24 on the 500,000 shares of $25 par common stock to stockholders of record on March 31, payable on April 30. Apr 30. Paid the cash dividends. July 9. Purchased 75,000 shares of the corporation’s own common stock at $26, recording the stock at cost. Aug. 29. Sold 40,000 shares of treasury stock at $32, receiving cash. Sept 1. Declared semiannual dividends of $1.20 on the preferred stock and $0.15 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding to be capitalized at the fair market value of the common stock, which is estimated at $30. Oct. 31. Paid the cash dividends and issued the certificates for the common stock dividend. Instructions Journalize the transactions. Prepare the journal entries to record the following transactions involving both the short-term and long-term investment of Corveau Corp., all of which occurred during calendar year 2009. Use the account short-term investments for any transactions that you determine at short-term. 1. On February 15, paid $100,000 cash to purchase Anthem’s 90-day short-term notes at par, which are dated February 15 and pay 6% interest (classified as held-to-maturity) 2. On march 22, bought 600 shares of Frain Industries common stock at $43 cash per share plus $140 brokerage fee (classified as long-term available-for-sale securities) 3. On May 15, received a check from Anthem in payment of the principal and 90 days ’interest on the notes purchased in transaction a. 4. On July 30, paid $30,000 cash to purchase Moto Electronics’ 5% notes at par, dated july 30, 2009, and maturing on January 30, 2010 (classified as trading securities). 5. On September 1, received a $0.40 per share cash dividend on the Frain Industries common stock purchased in transaction b. 6. On October 8, sold 300 shares of Frain Industries common stock for $49 common stock per share, less a $120 brokerage fee. 7. On October 30, received a check from Moto Electronics for three months’ interest on the notes purchased in transaction d.