Tyrell Co. entered into the following transactions involving short-term liabilities. Purchased $35,000 of merchandise on credit from Locust, terms n/30. Replaced the April 20 account payable to Locust with a 90-day, 8%, $35,000 note payable along with paying $0 in cash. Borrowed $66,000 cash from NBR Bank by signing a 120-day, 12%, $66,000 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. Borrowed $36,000 cash from Fargo Bank by signing a 60-day, 8%, $36,000 note payable. Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Paid the amount due on the note to Fargo Bank at the maturity date.Prepare journal entries for all the preceding transactions and events.

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Answered: Paid the amount due on the note to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Tyrell Co. entered into the following transactions involving short-term liabilities.

Purchased $35,000 of merchandise on credit from Locust, terms n/30.
Replaced the April 20 account payable to Locust with a 90-day, 8%, $35,000 note payable along with paying $0 in cash.
Borrowed $66,000 cash from NBR Bank by signing a 120-day, 12%, $66,000 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.
Borrowed $36,000 cash from Fargo Bank by signing a 60-day, 8%, $36,000 note payable.
Recorded an adjusting entry for accrued interest on the note to Fargo Bank.
Paid the amount due on the note to Fargo Bank at the maturity date.

Prepare journal entries for all the preceding transactions and events.

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