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Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.

2016

Apr.		20		Purchased $40,250 of merchandise on credit from Locust, terms 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% annual interest along with paying $5,250 in cash.
July		8		Borrowed $80,000 cash from NBR 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 NBR 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.

2017

__?__

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

2. Determine the interest due at maturity for each of the three notes. (Do not round your intermediate calculations. Use 360 days a year.)

PrincipalxRatexTime=InterestLocustx%x=NBR Bankx%x=Fargo Bankx%x=

Answer 1

1) JOURNAL ENTRIES IN THE BOOKS OF TYRELL CO.

DATE		PARTICULARS		L/F	DEBIT	CREDIT
20 apr 2016		merchendise a/c dr			40250
		to account payable a/c				40250
		(being marchendise purchesed)
19 may 2016		account payable a/c dr			40250
		to 10 % note a/c				35000
		to cash a/c				5250
		(being replacement of account payable)
8 july 2016		cash a/c dr			80000
		to 9% note a/c				80000
		(being borrowed money from bank)
16 aug 2016		10% note a/c dr			35000
		interest a/c dr (35000*90/360)*10/100			875
		to cash a/c				35875
		(being amount paid on 10% note with interest)
5 nov 2016		9% note a/c dr			80000
		interst a/c dr(80000*120/360)*9/100			2400
		to cash a/c				82400
		(being amount paid on 9% note with interest)
28 nov 2016		cash a/c dr			42000
		to 8 % note a/c				42000
		(being borrowed cash form bank )
31 dec 2016		intersest on 8% note a/c dr			317.33
		to accured interest (42000*8/100)*34/360				317.33
		(being accured interest caliculated on 34 days or year ended)
26 jan 2017		8% note a/c dr			42000
		interest a/c dr(42000*26/360)*8/100			242.67
		accured interest a/c dr			317.33
		to cash a/c				42560
		(being amount paid on 8% note with interest)

2) DETERMINE THE INTEREST DUE AT MATURITY FOR ECH OF THREE NOTES :

   Interest due = actual amount * interest rate * number of days

interest due on 90 days note = (35000 * 10/100) * 90/360

                                           = $ 875

interest due on 120 days note = (80000 * 9/100) * 120 /360

                                              = $ 2400

interest due on 60 days note = (42000 * 8 /100) * 60 /360

                                           = $ 560