Year 1 Apr. 20 Purchased $49,750 of merchandise on credit from Nguyen, terms n/30.May 19 Replaced the April 20 account payable to Nguyen with a 90-day, 8%, $38,000 note payable along with paying $11,750 in cash.July 8 Borrowed $102,000 cash from NMR Bank by signing a 120-day, 10%, $102,000 note payable.Aug. 17 Paid the amount due on the note to Nguyen at the maturity date.Nov. 5 Paid the amount due on the note to NMR Bank at the maturity date.Nov. 28 Borrowed $60,000 cash from Chicago Bank by signing a 60-day, 6%, $60,000 note payable.Dec. 31 Recorded an adjusting entry for accrued interest on the note to Chicago Bank. Year 2 Jan. 27 Paid the amount due on the note to Chicago Bank at the maturity date.1. Prepare a Calculation of Interest Gonzalez Co.Calculation of interest expenseAugust 17 - Nguyen note: Principal Interest rate Number of days' interest to be recorded in Year 1 Total interest expense - Year 1$0 2. Prepare Year 2 Payment DateAccount titleDebitCredit1/27/Year 2

Interest = Principal x Interest rate x Portion of the year

Answered: Year 1 Apr. 20 Purchased…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 8PA: Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions...

See similar textbooks

Related questions

Question

Year 1
Apr.	20	Purchased $49,750 of merchandise on credit from Nguyen, terms n/30.
May	19	Replaced the April 20 account payable to Nguyen with a 90-day, 8%, $38,000 note payable along with paying $11,750 in cash.
July	8	Borrowed $102,000 cash from NMR Bank by signing a 120-day, 10%, $102,000 note payable.
Aug.	17	Paid the amount due on the note to Nguyen at the maturity date.
Nov.	5	Paid the amount due on the note to NMR Bank at the maturity date.
Nov.	28	Borrowed $60,000 cash from Chicago Bank by signing a 60-day, 6%, $60,000 note payable.
Dec.	31	Recorded an adjusting entry for accrued interest on the note to Chicago Bank.

Year 2
Jan.	27	Paid the amount due on the note to Chicago Bank at the maturity date.

1. Prepare a Calculation of Interest

Gonzalez Co.
Calculation of interest expense
August 17 - Nguyen note:
Principal
Interest rate
Number of days' interest to be recorded in Year 1












Total interest expense - Year 1	$0

2. Prepare Year 2 Payment

Date	Account title	Debit	Credit
1/27/Year 2

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions