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April 20 Purchased $40,750 of merchandise on credit from Martin, terms n/30. May 19 Replaced the April 20 account payable to Martin with a 90-day, 8 %, $36,000 note payable along with paying $4,750 in cash. July 8 August 17 November 5 Borrowed $84,000 cash from CDR Bank by signing a 120-day, 12 %, $84,000 note payable. amount due on the note to Martin at the maturity date. amount due on the note to CDR Bank at the maturity date. November 28 Borrowed $45,000 cash from Chicago Bank by signing a 60-day, 12 %, $45,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank. Paid the Paid the Year 2 January 27 Paid the amount due on the note to Chicago Bank at the maturity date.

April 20 Purchased $40,750 of merchandise on credit from Martin, terms n/30. May 19 Replaced the April 20 account payable to Martin with a 90-day, 8 %, $36,000 note payable along with paying $4,750 in cash. July 8 August 17 November 5 Borrowed $84,000 cash from CDR Bank by signing a 120-day, 12 %, $84,000 note payable. amount due on the note to Martin at the maturity date. amount due on the note to CDR Bank at the maturity date. November 28 Borrowed $45,000 cash from Chicago Bank by signing a 60-day, 12 %, $45,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank. Paid the Paid the Year 2 January 27 Paid the amount due on the note to Chicago Bank at the maturity date.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Year 1 April 20 Purchased $40,750 of merchandise on credit from Martin, terms n/30. May 19 Replaced the April 20 account payable to Martin with a 90-day, 8 %, $36,000 note payable along with paying $4,750 in cash. Borrowed $84,000 cash from CDR Bank by signing a 120-day, 12 %, $84,000 note payable. Paid the amount due on the note to Martin at the maturity date. July 8 August 17 November 5 amount due on the note to CDR Bank at the maturity date. November 28 Borrowed $45,000 cash from Chicago Bank by signing a 60-day, 12 %, $45,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank. Paid the Year 2 January 27 Paid the amount due on the note to Chicago Bank at the maturity date. Requirement General Journal General Ledger Trial Balance Brown Company Calculation of interest expense Total interest expense - Year 1 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. August 17 - Martin note: Principal Interest rate Number of days' interest to be recorded in Year 1 Schedule of Calculation of Payables Interest $ Year 2 payment 0
Transcribed Image Text:Year 1 April 20 Purchased $40,750 of merchandise on credit from Martin, terms n/30. May 19 Replaced the April 20 account payable to Martin with a 90-day, 8 %, $36,000 note payable along with paying $4,750 in cash. Borrowed $84,000 cash from CDR Bank by signing a 120-day, 12 %, $84,000 note payable. Paid the amount due on the note to Martin at the maturity date. July 8 August 17 November 5 amount due on the note to CDR Bank at the maturity date. November 28 Borrowed $45,000 cash from Chicago Bank by signing a 60-day, 12 %, $45,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank. Paid the Year 2 January 27 Paid the amount due on the note to Chicago Bank at the maturity date. Requirement General Journal General Ledger Trial Balance Brown Company Calculation of interest expense Total interest expense - Year 1 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. August 17 - Martin note: Principal Interest rate Number of days' interest to be recorded in Year 1 Schedule of Calculation of Payables Interest $ Year 2 payment 0
Year 2 January 27 Paid the amount due on the note to Chicago Bank at the maturity date. Requirement General Journal Date 1/27/Year 2 General Ledger Trial Balance Prepare the January 27, Year 2 journal entry to record the payment of the Chicago note at maturity. Brown Company does NOT prepare reversing entries. Account title Schedule of Calculation of Payables Interest < Calculation of Interest Debit Year 2 paymen Credit Year 2 payment
Transcribed Image Text:Year 2 January 27 Paid the amount due on the note to Chicago Bank at the maturity date. Requirement General Journal Date 1/27/Year 2 General Ledger Trial Balance Prepare the January 27, Year 2 journal entry to record the payment of the Chicago note at maturity. Brown Company does NOT prepare reversing entries. Account title Schedule of Calculation of Payables Interest < Calculation of Interest Debit Year 2 paymen Credit Year 2 payment
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