Question

21 Required Information The following information applies to the questions displayed below.) Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017 Part 1 of 5 Doints 8 02:06 2016 Apr. 20 Purchased $38,500 of merchandise on credit from Locust, terns n/30. Tyrell uses the perpetual inventory system. May 19 Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 8% annual interest along with paying $3,500 in cash. July 8 Borrowed $57,000 cash from NBR Bank by signing a 120-day, 12% interest-bearing note with a face value of $57,000 _? 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 naturity date. Nov. 28 Borrowed $33,000 cash from Fargo Bank by signing a 60-day, 7% interest-bearing note with a face value of $33,000 Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank 2017 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. Locust NBR Bank Fargo Bank Maturity date

Answer 1

Answer-

1-

	Loctus	NBR Bank	Fargo Bank
Date of Note	19-May	8-July	28-Nov.
Term of Note (in days)	90	120	60
Maturity Date	17-August	5-Nov.	27-Jan.

2-

	Principal	*	Rate		*	Time	=	Interest
Locust	$35,000	*	8	%	*	90	=	$700
NBR Bank	$57,000	*	12	%	*	120	=	$2,280
Fargo Bank	$33,000	*	7	%	*	60	=	$385

3-Interest to be accrued at the end of 2016 = Principal * Interest rate* Term of note/ 360 days

=$33,000*7%*(30-28)+31/ 360

=$211.75

4-Interest expenses to be recorded in 2017=Principal * Interest rate* Term of note/ 360 days

=$33,000*7%*(60-33)/ 360

=$173.25

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