The following transactions of Windsor Enterprises occurred in 2016 and 2017

Question

Jul. 31, 2016 Purchased a delivery truck at a cost of $14,000, signing a six-month, 8% note payment for that amount.
Aug. 31, 2016 Recorded the month's sales of $105,000 ($40,000 for cash and the balance on credit). Sales amounts are subject to a 6% state sales tax. Ignore cost of goods sold.
Sept. 20, 2016 Paid the August sales tax to the state.
Dec. 31, 2016 Accrued warranty expense, which is estimated to be 3% of sales of $748,500.
Dec. 31, 2016 Accrued interest on the outstanding note payable.
Feb. 1, 2017 Paid off the note from July 31, 2016

Journalize the transactions in Windsor's general journal. Explanations are not required. Round to the nearest dollar.
What will be an ideal response

Answer 1

Date Accounts and Explanations Debit Credit
2016
Jul. 31 Delivery Truck 14,000
Short-term Notes Payable 14,000

Aug. 31 Cash ($40,000 x 1.06 ) 42,400
Accounts Receivable ($105,000 - 40,000 )(1.06 ) 68,900
Sales 105,000
Sales Tax Payable ($105,000 x .06 ) 6,300

Feb. 5 Sales Tax Payable 6,300
Cash 6,300

Dec. 31 Warranty Expense (3% x $748,500 ) 22,455
Estimated Warranty Payable 22,455

Dec. 31 Interest Expense (14,000 x 8% x 5/12 ) 467
Interest Payable 467

2017
Jan. 31 Short-term Notes Payable 14,000
Interest Expense 467
Interest Expense ($14,000 x 8% x 1/12 ) 93
Cash 14,560