Question

Required information Problem 9-1A Short-term notes payable transactions and entries LO P1 [The following information applies to the questions displayed below.] Tyrell Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 20 Purchased $35,500 of merchandise on credit from Locust, terms n/30 May 19 Replaced the April 20 account payable to Locust with a 90-day, 8% , $35,000 note payable along with paying $500 in cash 8 Borrowed $54,000 cash from NBR Bank by signing a 120-day, 10% , $54,000 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 July Nov. 28 Borrowed $27,000 cash from Fargo Bank by signing a 60-day, 8% , $ 27 ,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 Problem 9-1A Part 5 5. Prepare journal entries for all the preceding transactions and events. (Do not round your intermediate calculations.) : View journal entry worksheet View transaction list Debit No Date General Journal Credit 8 Jan 27 Cash

Answer 1

1)	Maturity date
			locust	NBR	fargo
	date of the note		19-May	8-Jul	28-Nov
	term of note		90	120	60
	maturity date		17-Aug	5-Nov	27-Jan
2)	interest due at maturity
		principal	*	Rate	*	time	=	interest
	locust	35,000	*	8%	*	90/360	=	700
	NBR	54,000	*	10%	*	120/360	=	1800
	Fargo	27,000	*	8%	*	60/360	=	360
3)	Amount in adjusting entry
	42,000*8%*33/360
	198
				Fargo Bank
			principal	*	Rate	*	time	=	interest
interest to be acccrued in 2016			27,000	*	8%	*	33/360	=	198
4)	interest expense to be recorded in 2017
	198
			principal	*	Rate	*	time	=	interest
interest to recorded in 2018			27,000	*	8%	*	27/360	=	162
	Journal entries
	Date	Accounting titles & Explanations				Debit	Credit
	2016
	20-Apr	inventory				35,500
		Accounts payable					35,500
	19-May	Accounts payable				35,500
		cash					500
		notes payable					35,000
	8-Jul	Cash				54,000
		notes payable					54,000
	17-Aug	notes payable				35,000
		interest expense				700
		cash					35,700
	5-Nov	notes payable				54,000
		interest expense				1,800
		cash					55,800
	28-Nov	Cash				27,000
		notes payable					27,000
	31-Dec	interest expense				198
		interest payable					198
	2017
	27-Jan	notes payable				27,000
		interest payable				198
		interest expense				162
		cash					27,360