Exercise $7-25($Static$)$ Transaction analysis$$various accounts LO $7-1,7-2,7-5,7-8,7-9$

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A company incurred the following transactions:

Income tax expense of $$1,100$ for the current period is accrued. Of the accrual, $$300$ represents deferred tax liabilities.

Bonds payable with a face amount of $$12,000$ are issued at a price of $97.$

Of the proceeds from the bonds in part b$,$ $$16,000$ is used to purchase land for future expansion.

Because of warranty claims, finished goods inventory costing $$266$ is sent to customers to replace defective products.

A three$-$month, $7\%$ note payable with a face amount of $$40,000$ was signed. The bank made the loan on a discount basis.

The next installment of a long$-$term serial bond requiring an annual principal repayment of $$50,000$ will become due within the current year.

Exercise $7-25($Static$)$ Part $1$

Required:

a$-1.$ Show the effect, if any, of each transaction or adjustment on the appropriate balance sheet category or on net income by selecting for each category affected the account name and amount, and indicating whether it is an addition $(+)$ or a subtraction $().$ Items that affect net income should not also be shown as affecting stockholders' equity.