JustAnswer



Tyrell Co. entered into the following transactions involving short-term liabilities in 2007 and 2008.

2007 Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms are 1/10, n/30. Tyrell uses the perpetual inventory system.

Merchandise Inventory Dr. 40250

Account Payable- Locust Cr 40250

May 19 Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 10% annual interest along with paying $5,250 in cash.

Account Payable- Locust DR. 40250

10% Notes Payable Cr. 35000

Cash Cr. 5250

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.

Cash Dr. 80000

9% Notes Payable Cr. 80000

_Aug 17___ Paid the amount due on the note to Locust at the maturity date.

10% Notes Payable Dr. 35000

Interest Expenses Dr. 875

Cash Cr. 35875

(35000*.1/360 x 90)

_Nov 5___ Paid the amount due on the note to National Bank at the maturity date.

9% Notes Payable Dr. 80000

Interest Expenses Dr. 2400

Cash Cr. 82400

(80000*.09/360 x120)

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.

Cash Dr. 42000

8% Notes Payable Cr. 42000

Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.

Interest expenses Dr 308

Interest payable Cr 308

42000 x .08/360 x 33

2008 Jan 27 Paid the amount due on the note to Fargo Bank at the maturity date.

8% Notes Payable Dr. 42000

Interest payable Dr. 308

Interest Expenses Dr. 252

Cash Cr. 42560

(42000*.08/360*27)

Prepare journal entries for all the preceding transactions

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download