E$4-8($Algo$)$ Recording Transactions Including Adjusting and Closing Entries LO$4-1,4-4$E$4-10($Algo$)$ Determining Financial Statement Effects of Interest on Two Notes LO$4-1$

Note $1$: On April $1$ of the current year, Warren Corporation received a $$50,000,5$ percent note from a customer in settlement of a $$50,000$ open account receivable. According to the terms, the principal of the note and interest are payable at the end of $12$ months. Warren's fiscal year ends on December $31.$

Note $2$: On August $1$ of the current year, to meet a cash shortage, Warren Corporation obtained a $$50,000,6$ percent loan from a local bank. The principal of the note and interest expense are payable at the end of six months.

Required:

For the relevant transaction dates of each note, indicate the amounts and direction of effects on the elements of the statement of financial position and the statement of earnings. $($Reminder: Assets $=$ Liabilities $+$ Shareholders' equity; Revenues $-$ Expenses $=$ Net earnings; and net earnings accounts are closed to retained earnings, a component of shareholders' equity.$)($Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.$)$

$\backslash$table$[[$Date$,$Statement of Financial Position,Statement of Earnings,,$],[,$Assets,Liabilities,$\backslash$table$[[$Shareholders$\text{'}],[$Equity$]],$Revenues,Expenses,Net Earnings$],[$Note $1$:$,,,,,,],[$April $1($current year$),,,,,,],[,,,,,,],[$December $31($current year$),,,,,,],[$March $31($next year$),,,,,,],[,,,,,,],[$Note $2$:$,,,,,,],[$August $1($current year$),,,,,,],[$December $31($current year$),,,,,,],[$January $31($next year$),,,,,,]]$

The following accounts are used by Britt's Knits Inc.

$\backslash$table$[[$Code$,$Accounts,Code,Accounts$],[$A$,$Cash,J$,$Contributed capital$],[$B$,$Office supplies,K$,$Retained earnings$],[$C$,$Accounts receivable,L$,$Service revenue$],[$D$,$Office equipment,M$,$Interest Revenue$],[$E$,$Accumulated depreciation,N$,$Wages expense$],[$F Note payable,$0,$Depreciation expense,$],[$G$,$Wages payable,P$,$Interest expense$],[$H$,$Interest payable,Q$,$Supplies expense$],[$I$,$Deferred service revenue,R$,$None of the accounts$]]$

Required:

For each of the following nine independent situations, give the journal entry by selecting the appropriate code$($s$)$ from the drop$-$down menu and enter the amount$($s$).$ The first transaction is used as an example.

$\backslash$table$[[,$Independent Situations,Debit,Credit$],[,$Code,Amount,Code,Amount$],[$a$.,$Accrued wages, unrecorded and unpaid at year$-$end, $$900.,N,900,$G$,900],[$c$.,$Dividends declared and paid during the year, $$1,400.,,,,],[$d$.,$Office supplies on hand during the year, $$900$; supplies on hand at year$-$end, $$260.,,,,],[$g$.,$At year$-$end, interest on note payable not yet recorded or paid, $$320.,,,,],[$h$.,$Balance at year$-$end in service revenue account, $$66,000.$ Give the closing entry at year$-$end.,,,,$],[$i$.,$Balance at year$-$end in interest expense, $$560.$ Give the closing entry at year$-$end.,,,,$]]$