Tyrell Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms n∕30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable along with paying $5,250 in cash. July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 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. Nov. 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, $42,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 ___?___ Paid the amount due on the note to Fargo Bank at the maturity date. 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. Assume a 360-day year. 3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. 4. Determine the interest expense recorded in Year 2. 5. Prepare journal entries for all the preceding transactions and events.
Tyrell Co. entered into the following transactions involving short-term liabilities.
Year 1
Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms n∕30.
May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable
along with paying $5,250 in cash.
July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 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.
Nov. 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, $42,000 note payable.
Dec. 31 Recorded an
Year 2
___?___ Paid the amount due on the note to Fargo Bank at the maturity date.
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. Assume a 360-day year.
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1.
4. Determine the interest expense recorded in Year 2.
5. Prepare
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