Question

At the end of 2022, the following information is available for Great Adventures.

• Additional interest for five months needs to be accrued on the $33,000, 6% loan obtained on August 1, 2021. Recall that annual interest is paid each July 31.
• Assume that $13,000 of the $33,000 loan discussed above is due next year.
• By the end of the year, $20,000 in gift cards have been redeemed. The company had sold gift cards of $28,000 during the year and recorded those as Deferred Revenue.
• Great Adventures is a defendant in litigation involving a biking accident during one of its adventure races. The company believes the likelihood of payment occurring is probable, and the estimated amount to be paid is $15,000.
• For sales of MU watches, Great Adventures offers a warranty against defect for one year. At the end of the year, the company estimates future warranty costs to be $7,000.

Prepare the journal entries for transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1