Question

Zing Cell Phone Company entered into the following transactions involving current liabilities during 2017 and 2018.

	2017
Mar.	14	Purchased merchandise on credit from Ferris Inc. for $162,000. The terms were 1/10, n/30 (assume a perpetual inventory system).
Apr.	14	Zing paid $36,000 cash and replaced the $126,000 remaining balance of the account payable to Ferris Inc. with a 5%, 60-day note payable.
May	21	Borrowed $136,000 from Scotia Bank by signing a 4.5%, 90-day note.
	?	Paid the note to Ferris Inc. at maturity.
	?	Paid the note to Scotia Bank at maturity.
Dec.	15	Borrowed $111,000 and signed a 5.25%, 120-day note with National Bank.
Dec.	31	Recorded an adjusting entry for the accrual of interest on the note to National Bank.
	2018
	?	Paid the note to National Bank at maturity.

Required:
1. Determine the maturity dates of the three notes just described.

	Ferris Inc. Scotia Bank National Bank Maturity date

2. Present journal entries for each of the preceding dates. (Use 365 days an year. Round your answers to 2 decimal places.)

1.Record the purchase of merchandise on credit.

2.Record the payment of cash and a note written to exchange due date.

3.Record the borrowing of cash with a 90-day against note.

4.Record the payment of note with interest.

5.Record the payment of note with interest.

6.Record the borrowing of cash with a 120-day note.

7.Record the accrued interest on note payable.

8.Record the payment of note with interest.

Answer 1

	Maturity dates
	Ferris	13-Jun
	scotia bank	19-Aug
	National bank	14-Apr
14-Mar	Merchandise	162000
	Accounts payable		162000
14-Apr	Accounts payable	162000
	Cash		36000
	Notes payable		126000
21-May	Cash	136000
	Notes payable		136000
13-Jun	Notes payable	126000
	Interest expense (126000*5%*60/365)	1035.62
	Cash		127035.62
19-Aug	Notes payable	136000
	Interest expense (136000*4.5%*90/365)	1509.04
	Cash		137509.04
15-Dec	Cash	111000
	Notes payable		111000
31-Dec	Interest expense (111000*5.25%*16/365)	255.45
	Interest payable		255.45
14-Apr	Notes payable	111000
	Interest payable	255.45
	Interest expense (111000*5.25%*104/365)	1660.44
	Cash		112915.89