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

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

Note: Use 360 days a year.

Year 1

April 20	Purchased $50,750 of merchandise on credit from Lee, terms n/30.
May 19	Replaced the April 20 account payable to Lee with a 90-day, 6%, $36,000 note payable along with paying $14,750 in cash.
July 8	Borrowed $108,000 cash from NBR Bank by signing a 120-day, 9%, $108,000 note payable.
August 17	Paid the amount due on the note to Lee at the maturity date.
November 5	Paid the amount due on the note to NBR Bank at the maturity date.
November 28	Borrowed $66,000 cash from Albany Bank by signing a 60-day, 8%, $66,000 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.

Enter the principal amount, interest rate, and number of days of interest to be recorded for each note. Verify that interest expense agrees with your journal entries and the trial balance.

Unadjusted Adjusted Post-closing

calculation of interest

Walker Company
Calculation of interest expense
August 17 - Lee note:
Principal
Interest rate
Number of days' interest to be recorded in Year 1
Total interest expense - Year 1	$0