Indiana Jones Company had the following selected transactions. Feb. 1 Signs

Indiana Jones Company had the following selected transactions.

Feb. 1 Signs a $50000 6-month 9%-interest-bearing note payable to CitiBank and receives $50000 in cash.

10 Cash register sales total $43200 which includes an 8% sales tax.

28 The payroll for the month consists of salaries and wages of $50000. All wages are subject to 8% FICA taxes. A total of $8900 federal income taxes are
withheld. The salaries are paid on March 1.

28 The company develops the following adjustment data.

1. Interest expense of $375 has been incurred on the note. 2. Employer payroll taxes include 8% FICA taxes a 5.4% state unemployment tax and a 0.8%
federal unemployment tax.

3. Some sales were made under warranty. Of the units sold under warranty 350 are expected to become defective. Repair costs are estimated to be $40 per
unit.

Instructions

(a) Journalize the February transactions.

(b) Journalize the adjusting entries at February 28.