The January 1, Year 1 trial balance for the Clark Company is found on the trial balance tab. The beginning balances are assumed.

Sanchez Company entered into the following transactions involving short-term liabilities.

Note: Use 360 days a year.

Year 1

April 20	Purchased $41,750 of merchandise on credit from Taylor, terms n/30.
May 19	Replaced the April 20 account payable to Taylor with a 90-day, 10%, $38,000 note payable along with paying $3,750 in cash.
July 8	Borrowed $90,000 cash from NYR Bank by signing a 120-day, 9%, $90,000 note payable.
August 17	Paid the amount due on the note to Taylor at the maturity date.
November 5	Paid the amount due on the note to NYR Bank at the maturity date.
November 28	Borrowed $51,000 cash from Albany Bank by signing a 60-day, 8%, $51,000 note payable.
December 31	Recorded an adjusting entry for accrued interest on the note to Albany Bank.

Year 2

January 27	Paid the amount due on the note to Albany Bank at the maturity date.

General Journal tab - Prepare the Year 1 journal entries related to the notes and accounts payable of Sanchez Co.

1. Purchased $41,750 of merchandise on credit from Taylor, terms n30. Sanchez uses the perpetual inventory system.

2. Replaced the April 20 account payable to Taylor with a 90-day, $38,000 note bearing 10% annual interest along with paying $3,750 in cash.

3. Borrowed $90,000 cash from NYR Bank by signing a 120-day, 9% interest-bearing note with a face value of $90,000.

4. Paid the amount due on the note to Taylor at the maturity date.

5. Paid the amount due on the note to NYR Bank at the maturity date.

6. Borrowed $51,000 cash from Albany Bank by signing a 60-day, 8% interest-bearing note with a face value of $51,000.

7. Recorded an adjusting entry for accrued interest on the note to Albany Bank.

Calculation of interest tab - Use the interest formula (P x R x T) to verify the amount of interest recorded in your entries. Verify that total interest expense agrees with the trial balance.

Year 2 payment tab - Prepare the January 27, Year 2 entry to record the repayment of the note at maturity.

Sanchez Company Calculation of interest expense August 17 - Taylor note: \begin{tabular}{|l|l|l|} \hline Principal & & \\ \hline Interest rate & & \\ \hline Number of days' interest to be recorded in Year 1 & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total interest expense - Year 1 & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} Prepare the January 27 , Year 2 journal entry to record the payment of the Albany note at maturity. Clark Company does NOT prepare reversing entries. Sanchez Company Calculation of interest expense August 17 - Taylor note: \begin{tabular}{|l|l|l|} \hline Principal & & \\ \hline Interest rate & & \\ \hline Number of days' interest to be recorded in Year 1 & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline Total interest expense - Year 1 & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} Prepare the January 27 , Year 2 journal entry to record the payment of the Albany note at maturity. Clark Company does NOT prepare reversing entries