Question - The following transactions of Smooth Sounds Music Company occurred during 2012 and 2013:
2012
Mar 3 Purchased a piano (inventory) for $50,000, signing a six-month, 8% note payable.
May 31 Borrowed $85,000 on an 8% note payable that calls for annual installment payments of $17,000 principal plus interest. Record the short-term note payable in a separate account from the long-term note payable.
Sep 3 Paid the six-month, 8% note at maturity.
Dec 31 Accrued warranty expense, which is estimated at 2.5% of sales of $196,000.
Dec 31 Accrued interest on the outstanding note payable.
2013
May 31 Paid the first installment and interest for one year on the outstanding note payable.
Required - Record the transactions in Smooth Sound's journal. Explanations are not required.