Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.

2016

Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system.

May 19 Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 10% annual interest along with paying $5,250 in cash.

July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9% interest-bearing note with a face value of $80,000.

___?___ Paid the amount due on the note to Locust at the maturity date.

___?___ Paid the amount due on the note to NBR Bank at the maturity date.

Nov. 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face value of $42,000.

Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.

2017

__?__ Paid the amount due on the note to Fargo Bank at the maturity date.

a.) Determine the interest expense to be recorded in the adjusting entry at the end of 2016. (Do not round your intermediate calculations. Use 360 days a year.)

	Principal	X	Rate		X	Time	=	Interest
Interest to be accrued in 2016		X	8	%	X	/	=	$

b.) Prepare journal entries for all the preceding transactions and events for 2016.

Purchased $40,250 of merchandise on credit from Locust, terms are n/30. Tyrell uses the perpetual inventory system.

Date	General Journal	Debit	Credit
Apr 20, 2016

Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 10% annual interest along with paying $5,250 in cash.

Date	General Journal	Debit	Credit
May 19, 2016

Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9% interest-bearing note with a face value of $80,000.

Date	General Journal	Debit	Credit
Jul 08, 2016

Paid the amount due on the note to Locust at the maturity date.

Date	General Journal	Debit	Credit
Aug 17, 2016

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

Date	General Journal	Debit	Credit
Nov 05, 2016

Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face value of $42,000.

Date	General Journal	Debit	Credit
Nov 28, 2016

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

Date	General Journal	Debit	Credit
Dec 31, 2016