Tyrell Co. entered into the following transactions involving short-term liabilities in 2014 and 2015. 2014
Apr 20. Purchased $40,250 of merchandise on credit from Locust, terms are 1/10, 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 10% nual interest along with paying $5,250 in cash.
July 8. Borrowed $80,000 cash from National Bank by signing a 120-day, 9% interest-bearing note with a face value of $80,000
?? Paid the amount due on the note to Locust at the maturity date
?? Paid the amount due on the note to National Bank at the maturity date
Nov 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face value of $42,000
Dec 31. Recorded an adjusting entry for accrued interest on the note to Fargo Bank.
2015
?? Paid the amount 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)
3. Determine the interest expense to be recorded in the adjusting entry at the end fo 2014.
4. Determine the interest expense to be recorded in 2015
5. Prepare journal entires for all the preceding transactions and events for years 2014 and 2015