Masys Store supported its operations for the year through short-term note financing as follows:

May 10: The Company entered into a new credit agreement with certain financial institutions providing for revolving credit borrowings and letters of credit in an aggregate amount not to exceed $2,400,000 million. Interest rates are adjustable.

Sep. 30: The company borrowed $800,000 on the revolving credit line, payable in 6 months, at an interest rate of 7.25%, due upon maturity.

Nov. 30: Additional cash needed during peak holiday sale period was funded through the issuance of 60- day, $320,000 commercial paper, discounted at 4%.

Jan. 29: Paid off the commercial paper debt on due date.

Mar. 31: Paid off the balance of $800,000 on the revolving credit line plus interest.

Required

Record the following journal entries, assuming a 360-day year for interest computations:

a. May 10Entered into credit line agreement.

b. September 30Issuance of $800,000 note payable.

c. November 30Issuance of $320,000 commercial paper. Compute the discount on note payable using 360 days as the base for prorating interest. For the $320,000 note, compute the interest accrual based upon the exact number of days outstanding.

d. December 31Adjusting entries.

e. January 29Payment of $320,000 commercial paper.

f. March 31Payment of $800,000 note payable.

Note: Round your answers to the nearest whole dollar. Note: If a journal entry isn't required on any of the dates shown, select "N/Adebit" and "N/Acredit" as the account names and leave the Dr. and Cr. answers blank (zero)

Date	Account Name	Dr.	Cr.
a. May 10	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	Entered line of credit.
b. Sept. 30	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	To record issuance of note payable.
c. Nov. 30	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	To record issuance of note payable.
d. Dec. 31	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	To record adjusting entry for note issued on Sept. 30.
Dec. 31	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	To record adjusting entry for note issued on Nov. 30.
e. Jan. 29	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	To record repayment of note issued on Nov 30.
f. Mar. 31	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	CashAccounts ReceivableInventoryEquipmentCopyrightAccounts PayableAccrued CompensationDeferred RevenueEstimated Litigation LiabilityInterest PayableSalaries PayableSales Taxes PayableWarranty LiabilityNote PayableDiscount on Note PayableAsset Retirement ObligationSales RevenueGift Card Breakage RevenueWarranty RevenueCost of Goods SoldInterest ExpenseLegal ExpenseSalaries ExpenseWarranty ExpenseGain on Litigation SettlementLoss on Litigation SettlementN/A - Debit accountN/A - Credit account		Answer
	To record repayment of note issued on Sept 30.