1 answer

Required information [The following information applies to the questions displayed below) Tyrell Co. entered into the...

Question:

Required information [The following information applies to the questions displayed below) Tyrell Co. entered into the followi
Year 2 Paid the amount due on the note to Fargo Bank at the naturity date. 2. Determine the interest due at maturity for each
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. (Do not round your Use 360 days a yea
Paid the amount due on the note to Fargo Bank at the naturity date. 4. Determine the interest expense recorded in Year 2. (Do
Journal entry worksheet < 1 2 3 4 5 6 7 Purchased $36,000 of merchandise on credit from Locust, terms n/30. Note: Enter debit
Required information [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 $36,000 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying $1,880 in cash. July 8 Borrowed 557,000 cash from NBR Bank by signing a 120-day, 11%, $57,000 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 $27,000 cash from Fargo Bank by signing a 60-day, 6%, $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. Required: 1. Determine the maturity date for each of the three notes described. Locust NBR Bank Fargo Bank Maturity date Prev 1 2 .5 of 6 Next >
Year 2 Paid the amount due on the note to Fargo Bank at the naturity date. 2. Determine the interest due at maturity for each of the three notes. (Do not round your intermediate cald year.) Principal X Rate x Time - Interest Locust NBR Bank Fargo Bank
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. (Do not round your Use 360 days a year.) Year End Accrual Required For: Principal * Rate Fargo Bank * Time % - Interest Interest to be accrued in Year 1 ces
Paid the amount due on the note to Fargo Bank at the naturity date. 4. Determine the interest expense recorded in Year 2. (Do not round intermediate calculations and ro nearest whole dollar. Use 360 days a year.) Year end accrual required for: Fargo Bank x Time Principal X Rate - Interest Interest to be recorded in Year 2
Journal entry worksheet < 1 2 3 4 5 6 7 Purchased $36,000 of merchandise on credit from Locust, terms n/30. Note: Enter debits before credits. General Journal Debit Credit Date Apr 20 Record entry Clear entry View general journal

Answers

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 * 9% * 90/360 = 788
NBR 57,000 * 11% * 120/360 = 2090
Fargo 27,000 * 6% * 60/360 = 270
3) Amount in adjusting entry
Fargo Bank
principal * Rate * time = interest
interest to be acccrued in 2016 27,000 * 6% * 33/360 = 149
4) interest expense to be recorded in 2017
principal * Rate * time = interest
interest to recorded in 2018 27,000 * 6% * 27/360 = 122
Journal entries
Date Accounting titles & Explanations Debit Credit
2016
20-Apr inventory 36,000
Accounts payable 36,000
19-May Accounts payable 36,000
cash 1,000
notes payable 35,000
8-Jul Cash 57,000
notes payable 57,000
17-Aug notes payable 35,000
interest expense 788
cash 35,788
5-Nov notes payable 57,000
interest expense 2,090
cash 59,090
28-Nov Cash 27,000
notes payable 27,000
31-Dec interest expense 149
interest payable 149
2017
27-Jan notes payable 27,000
interest payable 149
interest expense 122
cash 27,270
.

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