Question

The following transactions of Houston Pharmacies occurred during 2017 and 2018:

2017
Jan. 9 Purchased computer equipment at a cost of $ 9,000​, signing a​ six-month, 7​%
note payable for that amount.
29 Recorded the​ week's sales of $ 69,000​, ​three-fourths on credit and​ one-fourth
for cash. Sales amounts are subject to a​ 6% state sales tax. Ignore cost of
goods sold.
Feb. 5 Sent the last​ week's sales tax to the state.
Jul. 9 Paid the​ six-month, 7​% ​note, plus​ interest, at maturity.
Aug. 31 Purchased merchandise inventory for $ 3,000​, signing a​ six-month, 11​% note
payable. The company uses the perpetual inventory system.
Dec. 31 Accrued warranty​ expense, which is estimated at 3​% of sales of $ 601,000.
31 Accrued interest on all outstanding notes payable.
2018
Feb. 28 Paid the​ six-month 11​% ​note, plus​ interest, at maturity.

Journalize the transactions in Houston’s general journal. Explanations are not required.

Answer 1

Please see below for all the journal entries required for Houston.

Step-by-step explanation:

2017

Jan. 9

Debit: Computer Equipment $9,000

Debit: Interest Expense $630

Credit: Interest Payable ($9,000 x 7%) $630

Credit: Notes Payable $9,000

Jan. 29

Debit: Accounts Receivables ($69,000 x 3/4) $51,750

Debit: Cash ($69,000 x 1/4) $17,250

Credit: Sales Tax Payable ($69,000 x 6%) $4,140

Credit: Sales $69,000

Feb. 5

Debit: Sales Tax Payable $4,140

Credit: Cash $4,140

Jul. 9

Debit: Interest Payable ($9,000 x 7%) $630

Debit: Notes Payable $9,000

Credit: Cash $9,630

Aug. 31

Debit: Inventory $3,000

Debit: Interest Expense $330

Credit: Interest Payable ($3,000 x 11%) $330

Credit: Notes Payable $3,000

Dec. 31

Debit: Warranty Expense ($601,000 x 3%) $18,030

Credit: Accrued Warranty $18,030

Dec. 31

Debit: Interest Payable $330

Credit: Accrued Interest $330

2018

Feb. 28

Debit: Accrued Interest $330

Debit: Notes Payable $3,000

Credit: Cash $3,330