Question: 1. A restaurant made cash sales of $4,000 subject to a 5% sales tax. Record the sales and the related sales tax. Also record the

1. A restaurant made cash sales of $4,000 subject to a 5% sales tax. Record the sales and the related sales tax. Also record the payment of the tax to the state.

2. On October 1, 2016, Rhodes Company purchased equipment at a cost of $10,000, signing a nine-month, 8% note payable for that amount. Record the October 1 purchase. Also record the adjusting entry needed on December 31, 2016, and payment of the note plus interest at maturity on July 1, 2017.

3. How does a contingent liability differ from a known liability? When would a contingent liability be journalized?

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