Prepare current liability entries, adjusting entries, and current liabilities section

On January 1, 2006, the ledger of Shumway Software Company contains the following liability accounts.

Accounts Payable
$42,500

Sales Taxes Payable
5,800

Unearned Service Revenue
15,000

During January the following selected transactions occurred.

Jan. 1
Borrowed $15,000 in cash from Amsterdam Bank on a 4-month, 8%, $15,000 note.
5
Sold merchandise for cash totaling $10,400, which includes 4% sales taxes.

12
Provided services for customers who had made advance payments of $9,000. (Credit Service Revenue.)

14
Paid state treasurer's department for sales taxes collected in December 2005, $5,800.

20
Sold 700 units of a new product on credit at $52 per unit, plus 4% sales tax.

25
Sold merchandise for cash totaling $12,480, which includes 4% sales taxes.

Instructions

Journalize the January transactions.
Journalize the adjusting entry at January 31 for the outstanding notes payable.
Prepare the current liabilities section of the balance sheet at January 31, 2006. Assume no change in accounts payable.

(c) Current liability total $65,936

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...ch includes 4% sales taxes.
Jan. 12: Provided services for customers who had made advance payments of $9,000. (Credit service revenue)
Jan. 14: Paid state treasurer's dept. for sales tax collected in Dec. 2005, $5,800.
Jan 20: Sold 700 units of a new product on credit at $52 per unit, plus 4% sales tax.
Jan 25: Sold merchandise for cash totaling $12,480, which includes 4% sales tax.

Instructions:
a. Journalize the January transactions.

Jan. 1 Cash 15,000
Notes ...