FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Problem 9-1A (Static) Short-term notes payable transactions and entries LO P1
[The following information applies to the questions displayed below.]
Tyrell Company entered into the following transactions involving short-term liabilities.
Year 1
April 20 Purchased $40,250 of merchandise on credit 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 120-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.
November 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, $42,000 note payable.
December 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.
Problem 9-1A (Static) Part 3
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1.
Note: Do not round your intermediate calculations. Use 360 days a year.
Year End Accrual Required For:
Fargo Bank
Principal
Rate
x
x
Time
Interest to be accrued in Year 1
x
% x
=
Interest
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Transcribed Image Text:Required information Problem 9-1A (Static) Short-term notes payable transactions and entries LO P1 [The following information applies to the questions displayed below.] Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $40,250 of merchandise on credit 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 120-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. November 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, $42,000 note payable. December 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. Problem 9-1A (Static) Part 3 3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. Note: Do not round your intermediate calculations. Use 360 days a year. Year End Accrual Required For: Fargo Bank Principal Rate x x Time Interest to be accrued in Year 1 x % x = Interest
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