Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $40,000 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying $5,000 in cash. July 8 Borrowed $60,000 cash from NDR Bank by signing a 120-day, 11%, $60,000 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 $33,000 cash from Fargo Bank by signing a 60-day, 8%, $33,000 note payable. December 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.
Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $40,000 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying $5,000 in cash. July 8 Borrowed $60,000 cash from NDR Bank by signing a 120-day, 11%, $60,000 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 $33,000 cash from Fargo Bank by signing a 60-day, 8%, $33,000 note payable. December 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: accounting
Transcribed Image Text:Tyrell Company entered into the following transactions involving short-term liabilities.
Year 1
April 20 Purchased $40,000 of merchandise on credit from Locust, terms n/30.
May 19
Replaced the April 20 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying
$5,000 in cash.
July 8
Borrowed $60,000 cash from NBR Bank by signing a 120-day, 11%, $60,000 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 $33,000 cash from Fargo Bank by signing a 60-day, 8%, $33,000 note payable.
December 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.
Transcribed Image Text:4. Determine the interest expense recorded in Year 2.
Note: Do not round intermediate calculations and round your final answers to nearest whole dollar. Use 360 day=
Year End Accrual Required For:
Interest to be recorded in Year 2
Principal
Rate
Fargo Bank
%
Time
Interest
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