The following transactions were entered into by the Dewey Appliance Company during the month of December.
A. On December 6, Dewey received a deposit from Heidegger Company for a refrigerator to be used at a charity cookout. The deposit of $3,000 will be returned when the refrigerator is returned, most likely in early January.
B. The Company recorded cash sales of $621,000 during December. This amount includes 8% sales tax that must be remitted to the state by the 15th of the following month.
C. On December 10, the Company borrowed $100,000 from the Strauss Company. The loan carries a 12% interest rate, due in one year, and interest is due when the note is paid.
D. On December 15, The Company purchased a delivery truck for $45,000, paying $10,000 in cash and signing a one-year, 15% note for the balance.
Instructions:
a) Prepare journal entries for the transactions listed above.
b) Assumming Dewey's year-end is December 31, prepare adjusting journal entries for the transactions which require adjustments.