2.Current liabilities: entries and disclosure. A review of selected financial activities of Visconti's during 20XX disclosed the following:
12/1: Borrowed $20,000 from the First City Bank by signing a 3- month, 15% note payable. Interest and principal are due at maturity.
2/10: Established a warranty liability for the XY-80, a new product. Sales are expected to total 1,000 units during the month. Past experience with similar products indicates that 2% of the units will require repair, with warranty costs averaging $27 per unit.
12/22: Purchased $16,000 of merchandise on account from Oregon Company, terms 2/10, n/30.
12/26: Borrowed $5,000 from First City Bank; signed a $5,120 note payable due in 60 days.
12/31: Repaired six XY-80s during the month at a total cost of $162.
12/31: Accrued 3 days of salaries at a total cost of $1,400.
12/31: Accrued vacation pay amounting to 6% of December's $36,000 total wage and salary expense.
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