Problem - On January 1, 2015, the ledger of Accardo Company contains the following liability accounts.
Accounts Payable $54,940
Sales Taxes Payable 8,890
Unearned Service Revenue 15,820
During January, the following selected transactions occurred.
Jan. 5 - Sold merchandise for cash totaling $16,524, which includes 8% sales taxes.
Jan. 12 - Performed services for customers who had made advance payments of $10,340. (Credit Service Revenue.)
Jan. 14 - Paid state revenue department for sales taxes collected in December 2014 ($8,890).
Jan. 20 - Sold 850 units of a new product on credit at $50 per unit, plus 8% sales tax.
Jan. 21 - Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note.
Jan. 25 - Sold merchandise for cash totaling $9,288, which includes 8% sales taxes.
Required -
Journalize the January transactions.
Journalize the adjusting entries at January 31 for the outstanding notes payable. (Hint: Use one-third of a month for the Girard Bank note.)
Prepare the current liabilities section of the balance sheet at January 31, 2015. Assume no change in accounts payable.