Year 1

April 20	Purchased $42,750 of merchandise on credit from Griffin, terms n/30.
May 19	Replaced the April 20 account payable to Griffin with a 90-day, 12%, $36,000 note payable along with paying $6,750 in cash.
July 8	Borrowed $96,000 cash from NMR Bank by signing a 120-day, 6%, $96,000 note payable.
August 17	Paid the amount due on the note to Griffin at the maturity date.
November 5	Paid the amount due on the note to NMR Bank at the maturity date.
November 28	Borrowed $57,000 cash from Austin Bank by signing a 60-day, 8%, $57,000 note payable.
December 31	Recorded an adjusting entry for accrued interest on the note to Austin Bank.

Year 2

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

QUESTION

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.

The January 1, Year 1 trial balance for the Lewis Company is found on the trial balance tab. The beginning balances are assumed. Carter Company entered into the following transactions involving short-term liabilities. (Use 360 days a year.) cash. Year 1 April 20 Purchased $42,750 of merchandise on credit from Griffin, terms n/30. May 19 Replaced the April 20 account payable to Griffin with a 90-day, 12%, $36,000 note payable along with paying $6,750 in July 8 Borrowed $96,000 cash from NMR Bank by signing a 120-day, 5%, $96,000 note payable. August 17 Paid the amount due on the note to Griffin at the maturity date. November 5 Paid the amount due on the note to NMR Bank at the maturity date. November 28 Borrowed $57,000 cash from Austin Bank by signing a 60-day, 8%, $57,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Austin Bank. Year 2 January 27 Paid the amount due on the note to Austin Bank at the maturity date. Requirement General Journal General Ledger Trial Balance Schedule of Payables Calculation of Interest Year 2 payment 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. pore agree w Your Juara IS LITT DONCICE. Carter Company Calculation of interest expense August 17 - Griffin note: Principal Interest rate Number of days' interest to be recorded in Year 1 Total interest expense - Year 1 0 Date Account Title Debit Credit No 1 April 20 42,750 Merchandise inventory Accounts payable - Griffin 42,750 2 May 19 42,750 Accounts payable - Griffin Notes payable - Griffin Cash 36,000 6,750 3 July 08 96,000 Cash Notes payable - NMR Bank 96,000 4 August 17 Notes payable - Griffin 36,000 1,080 37,080 5 November 05 Notes payable - NMR Bank 96,000 1,920 97,920 6 November 28 57,000 Cash Notes payable - Austin 57,000 7 December 31 418 Interest expense Interest payable 418 Year 1 April 20 Purchased $42,750 of merchandise on credit from Griffin, terms n/30. May 19 Replaced the April 20 account payable to Griffin with a 90-day, 12%, $36,000 note payable along with paying $6,750 in cash. July 8 Borrowed $96,000 cash from NMR Bank by signing a 120-day, 6%, $96,000 note payable. August 17 Paid the amount due on the note to Griffin at the maturity date. November 5 Paid the amount due on the note to NMR Bank at the maturity date. November 28 Borrowed $57,000 cash from Austin Bank by signing a 60-day, 8%, $57,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Austin Bank. Year 2 January 27 Paid the amount due on the note to Austin Bank at the maturity date. Requirement General Journal General Ledger Trial Balance Schedule of Payables Calculation of Interest Year 2 payment Prepare the January 27, Year 2 journal entry to record the payment of the Austin note at maturity. Lewis Company does NOT prepare reversing entries. Credit Date 1/27/Year 2 Account title Interest expense Interest payable Notes payable - Austin Cash Debit 342 418 57,000 57,760