Problem 11-1A Short-term notes payable transactions and entries P1 Tyrell Co. entered into the following transactions invohing short-term liabilities. Year J Apr, 20 Purchased $40,250 of merchandise on cued it from Locust, terms n/30.
May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable
along with paying $5,250 in cash. July 8 Borrowed $80,000 cash from NBR Bank by signing a J20-day, 9%, $80,000 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. Nov. 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, S42,000 note payable, Dec. 31 Recorded an
Year 2 ? 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.
2. Determine the interest due at maturity for each of the three notes. Assume a 360-day year. Check (2; Locust. $875
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1.
[3} £303
4. Determine the interest expense recorded in Year 2.
[4} £252
5. Prepare
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FUNDAMENTAL ACCT PRIN CONNECT ACCESS
- Entries for discounted note payable A business issued a 60-day note for 75,000 to a creditor on account. The note was discounted at 7%. Journalize the entries to record (A) the issuance of the note and (B) the payment of the note at maturity.arrow_forwardProceeds from notes payable On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a 45-day note with a face amount of 150,000. A. Determine the proceeds of the note, assuming the note carries an interest rate of 10%. B. Determine the proceeds of the note, assuming the note is discounted at 10%.arrow_forwardLiability transactions The following items were selected from among the transactions completed by Sherwood Co. during the current year: Mar. 1. Purchased merchandise on account from Kirkwood Co., 175,000, terms n/30. 31. Issued a 30-day, 6% note for 175,000 to Kirkwood Co., on account. Apr. 30. Paid Kirkwood Co. the amount owed on the note of March 31. June 1. Borrowed 400,000 from Triple Creek Bank, issuing a 45-day, 5% note. July 1. Purchased tools by issuing a 45,000,60-day note to Poulin Co., which discounted the note at the rate of 7%. 16. Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new 30-day, 6% note for 400,000. (Journalize both the debit and credit to the notes payable account.) Aug. 15. Paid Triple Creek Bank the amount due on the note of July 16. 30. Paid Poulin Co. the amount due on the note of July 1. Dec. 1. Purchased equipment from Greenwood Co. for 260,000, paying 40,000 cash and issuing a series of ten 9% notes for 22,000 each, coming due at 30-day intervals. 22. Settled a product liability lawsuit with a customer for 50,000, payable in January. Accrued the loss in a litigation claims payable account. 31. Paid the amount due to Greenwood Co. on the first note in the series issued on December 1. Instructions 1. Journalize the transactions. 2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year: A. Product warranty cost, 80,000. B. Interest on the nine remaining notes owed to Greenwood Co.arrow_forward
- Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning