Held The January 1, Year 1 trial balance for the Mitchell Company is found on the trial balance tab. The beginning balances are assumed Lewis Co. entered into the following transactions involving short-term liabilities (Use 360 days a year.) Year 1 Ape. May 5:17 July Aug. NOV. Nov. Dec. 20 Purchased $50, 250 of merchandise on credit from Brown, ter/30. 19 Replaced the April 20 account payable to Brown with a 90-day, 109, $39,000 note payable along with paying $11,250 in cash Borrowed $105,000 cash from AXR Bank by signing a 120-day. 61. $105,000 note payable. 17 Paid the amount due on the note to Brown at the maturity date. 5 Paid the amount due on the note to AXR Bank at the maturity date. 28 Borrowed 563,000 cash from Rochester Bank by signing - Co-day, 121, 563,000 note payable. 31 Recorded an adjusting entry for accrued interest on the note to Rochester Bank. Year 2 27 Paid the amount due on the note to Rochester Bank at the maturity date. General Requirement General Trial Balance Schedule of Journal Calculation of Year 2 Ledger Payables Interest payment Prepare the journal entries related to notes and accounts payable. Hint: Use the "Calculation of Interest" tab to ensure the accuracy of your entries. View transaction list Journal entry worksheet 1 2 3 4 5 6 7 > Purchased $50,250 of merchandise on credit from Brown, terms 30. Lewis uses the perpetual inventory system. Note: Enter debits before credits Date Account Title Debli Credit Apr 20 Record entry Clear entry View general Journal General General Requirement Schedule of Trial Balance Calculation of Journal Year 2 Ledger Payables Interest payment Prepare the journal entries related to notes and accounts payable. Hint: Use the "Calculation of Inte accuracy of your entries. 0 View transaction list Journal entry worksheet Paid the amount due on the note to Brown at the maturity date. Note: Enter debits before credits Date Account Title Debit Credit Aug 17 Record entry Clear entry View general Journal Requirement General Journal General Ledger Trial Balance Schedule of Payables Calculation of Interest Year 2 payment Prepare the fournal entries related to notes and accounts payable. Hint: Use the 'Calculation of Interest' tab to ensure the accuracy of your entries. View transaction list Journal entry worksheet Help Requirement General General Schedule of Tal Balance Calculation of Journal Year 2 Ledger Payables Interest payment Prepare the journal entries related to notes and accounts payable. Hint: Use the calculation of Interest' tab to ensure the accuracy of your entries View transaction list Journal entry worksheet Recorded an adjusting entry for accrued interest on the note to Rochester Bank. Note: Enter debits before credits Date Account Title Debit Credit Dec 31 Record entry Clear entry View general Journal Requirement General Journal General Ledger Trial Balance Schedule of Payables Calculation of Interest Year 2 payment General Ledger Account Cash No. Debit Date Jan 01 Credit Merchandise Inventory Debit Credit Balance 47,000 No. Date Jan 01 Balance 8,000 Mitchell, Capital Debit Credit No. Date Jan 01 Balance 55,000 Year 2 payment General General Requirement Tral Balance Schedule of Calculation of Journal Ledger Payables Interest Here are the balances in Accounts and Notes payable based on your journal entries: Lewis Co. Schedule of Accounts Payable Total accounts payable 0 Lewis Co. Schedule of Notes Payable $ 0 Total notes payable $ 39,000 10.0% 90 975 Lewis Co. Calculation of interest expense August 17 - Brown note: Principal Interest rate Number of days' interest to be recorded in Year 1 Interest - Principal x rate x days/360 = November 5 - AKR Bank note: Principal Interest rate Number of days' interest to be recorded in Year 1 Interest = Principal x rate x days/360 = November 28 - Accrued interest - Rochester note: Principal Interest rate Number of days' interest to be recorded in Year 1 Interest - Principal x rate x days/360 = 105,000 6.0% 120 $ 2,100 $ 63,000 12.0% 60 1,260 $ Total interest expense - Year 1 $ 4,335 $ January 27, Year 2 - Interest expense - Rochester note: Principal Interest rate Number of days' interest to be recorded in Year 2 Interest = Principal x rate x days/360 = 57,000 12.0% 33 $ 627 Requirement General General Schedule of Trial Balance Calculation of Journal Year 2 Ledger Payables Interest payment Prepare the January 27, Year 2 journal entry to record the payment of the Rochester note at maturity. Mitchell Company does NOT prepare reversing entries. Date Account title Debit Credit 1/27/Year 2
