Prepare the journal entries necessary to record the following transactions. (9 POINTS) 1. In 2017, Payton...

    

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Prepare the journal entries necessary to record the following transactions. (9 POINTS) 1. In 2017, Payton Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products. The estimated warranty costs related to dollar sales are recorded at 2% of sales each year. Sales in 2017 totaled $400,000. Actual warranty expenditures in 2017n totaled $7,000. 2. On July 1, the company purchased land for $100,000 from Raney Company, giving a one-year, 5% note for the balance. 3. On September 30, the company discounted its $250,000, one-year zero-interest- bearing note at First Bank receiving $225,000 in cash. B. Prepare the adjusting entries necessary at December 31, 2017 in order to properly report interest expense related to the above note transactions in items 2 and 3. (6 POINTS) Prepare the journal entries necessary to record the following transactions. (9 POINTS) 1. In 2017, Payton Corporation began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products. The estimated warranty costs related to dollar sales are recorded at 2% of sales each year. Sales in 2017 totaled $400,000. Actual warranty expenditures in 2017n totaled $7,000. 2. On July 1, the company purchased land for $100,000 from Raney Company, giving a one-year, 5% note for the balance. 3. On September 30, the company discounted its $250,000, one-year zero-interest- bearing note at First Bank receiving $225,000 in cash. B. Prepare the adjusting entries necessary at December 31, 2017 in order to properly report interest expense related to the above note transactions in items 2 and 3. (6 POINTS)

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1 Journal entry to record estimated warranty costs for 2017 Debit Warranty Expense 400000 2 Credit E... View the full answer