Chapter 11, Problem 1BPSB

Problem 11-1B Short-term notes payable transactions and entries P1 Warner Co. entered into the following transactions invohing short-term liabilities. Yearl Apr, 22 Purchased $5,000 of merchandise on credit from Fox-Pro, terms n/30.
May 23 Replaced the April 22 account payable (o Fox-Pro with a 60-day, 15% S4,6O0 note payable along with paying $400 in cash. July 15 Borrowed SI2,000 cash from Spring Bank by signing a 120-day, J0%, $12,000 note payable, ? Paid the amount due on the note to Fox-Pro at maturity. ? Paid the amount due on the note to Spring Bank at maturity, Dec. 6 Borrowed $8,000 cash From City Bank by signing a 45-day, °%, $8,000 note payable, 31 Recorded an adjusting entry for accrued interest on the note to City Bank,

Year 2 ? Paid the amount due on the note to City Bank at maturity. Required

1. Determine the mafrtrity 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. Check (2: Fox-Pro. $115
3. Determine the interest expense recorded in the adjusting entry at the end ofYear 1.
[3} £50
4. Detenriine the interest expense recorded in Year 2. [4) HO
5. Prepare journal entries for all the preceding transactions and events.