Question 1 - On June 1, Addidas Co. sold 15,000 yearly subscriptions of its monthly magazine to customers for $22.00 each. Customers received their first subscription of the magazine July 1. Prepare the journal entries for June 1 and July 1.
Madison Co. sells 13,000 scanners at a price of $250.00 each. The selling price includes a warranty (1 year) on parts. Madison expects that 4.5% of the scanners will be defective and that warranty repair costs will be $56 per unit. Complete the following:
a. Journalize the sale (assume a 7.75% sales tax rate).
b. Estimate, and then journalize the warranty liability.
Question 2 - Madison 101 honored scanners (from #5 above). Prepare the journal entry needed.
Lucy Company signed a 4 - year, 6.5%, $160,000 note payable. They are required to make annual payments of $40,000 (principal), and interest owed.
a. Journalize the issuance of the note.
b. Journalize the first two annual payment.