Question
Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $36,500 of merchandise on credit from Locust, terms n/30. May
Tyrell Company entered into the following transactions involving short-term liabilities. Year 1
April 20 | Purchased $36,500 of merchandise on credit from Locust, terms n/30. |
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May 19 | Replaced the April 20 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying $1,500 in cash. |
July 8 | Borrowed $69,000 cash from NBR Bank by signing a 120-day, 11%, $69,000 note payable. |
__?__ | 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. |
November 28 | Borrowed $27,000 cash from Fargo Bank by signing a 60-day, 8%, $27,000 note payable. |
December 31 | Recorded an adjusting entry for accrued interest on the note to Fargo Ban |
Year 2
__?__ | Paid the amount due on the note to Fargo Bank at the maturity date. |
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Required: 1. Determine the maturity date for each of the three notes described.
2. Determine the interest due at maturity for each of the three notes. (Do not round intermediate calculations and round your final answer to nearest whole dollar. Use 360 days a year.)
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. (Do not round intermediate calculations and round your final answer to nearest whole dollar. Use 360 days a year.)
4. Determine the interest expense recorded in Year 2. (Do not round intermediate calculations and round your final answers to nearest whole dollar. Use 360 days a year.)
5. Prepare journal entries for all the preceding transactions and events. (Do not round your intermediate calculations.)
\begin{tabular}{|l|c|c|c|} \hline & Locust & NBR Bank & Fargo Bank \\ \hline Maturity date & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|l|l|} \hline & Principal & & Rate & Time & = & Interest \\ \hline Locust & & & & % & & = \\ \hline NBR Bank & & & & % & & = \\ \hline Fargo Bank & & & & % & & = \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|l|l|l|l|} \hline Year End Accrual Required For: & \multicolumn{4}{|c|}{ Fargo Bank } \\ \hline & Principal & & Rate & & Time & = & Interest \\ \hline Interest to be accrued in Year 1 & & & & % & & & = & \\ \hline \end{tabular} Year End Accrual Required For: Fargo Bank Interest to be recorded in Year 2 Journal entry worksheet 8 Purchased $36,500 of merchandise on credit from Locust, terms n/30. Note: Enter debits before credits. Journal entry worksheet Replaced the April 20 account payable to Locust with a 90-day, 9\%, $35,000 note payable along with paying $1,500 in cash. Note: Enter debits before credits. Journal entry worksheet Borrowed $69,000 cash from NBR Bank by signing a 120-day, 11%,$69,000 note payable. Note: Enter debits before credits. Journal entry worksheet 8 Paid the amount due on the note to Locust at the maturity date. Note: Enter debits before credits. Journal entry worksheet 1 8 Paid the amount due on the note to NBR Bank at the maturity date. Note: Enter debits before credits. Journal entry worksheet Borrowed $27,000 cash from Fargo Bank by signing a 60 -day, 8%,$27,000 note payable. Note: Enter debits before credits. Journal entry worksheet
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