Reference no: EM131771451

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.