Question

Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017. 2016 Apr. 20 Purchased $37,000 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 9% annual interest along with paying $2,000 in cash. July 8 Borrowed $51,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $51,000. __?__ 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 $33,000 cash from Fargo Bank by signing a 60-day, 7% interest-bearing note with a face value of $33,000. 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. Prepare journal entries for all the preceding transactions and events for 2016. (Do not round your intermediate calculations.)

1. Purchased $37,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system.

2. Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 9% annual interest along with paying $2,000 in cash.

3. Borrowed $51,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $51,000.

4. Paid the amount due on the note to Locust at the maturity date.

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

6. Borrowed $33,000 cash from Fargo Bank by signing a 60-day, 7% interest-bearing note with a face value of $33,000.

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

Answer 1

Journal of M/s Tyrell Co. for the year 2016
Date	Particulars	Debit	Credit
20-04-16	Purchases	$   37,000.00
	Locust		$   37,000.00
	Being Goods purchased from Locust on n/30 terms)
19-05-16	Locust	$   37,000.00
	Bills Payable note		$   35,000.00
	Cash		$     2,000.00
	(Being payment made to Locust with 90 days note @9% annual interest rate and $2000 in cash)
08-07-16	Cash	$   51,000.00
	NBR Bank		$   51,000.00
	(Being Cash borrowed from NBR bank @ 11%, for 120 days)
17-08-16	Bills Payable note	$   35,000.00
	Interest on Bills Payable	$         776.71
	Cash		$   35,776.71
	(Being Bills payable note discharged along with interest of $776.71)
05-11-16	NBR Bank	$   51,000.00
	Interest on borrowings from NBR	$     1,844.38
	Cash		$   52,844.38
	(Being Amount borrowed from NBR Bank discharged along with interest)
28-11-16	Cash	$   33,000.00
	Fargo Bank		$   33,000.00
	(Being Amount borrowed from Fargo Bank @7 % for 60days of face value $33000)
31-12-16	Interest on loan from Fargo Bank	$         215.18
	Fargo Bank		$         215.18
	(Being Interest accrued for 34 days recorded)
		$246,836.27	$246,836.27
Journal of M/s Tyrell Co. for the year 2017
Date	Particulars	Debit	Credit
27-01-17	Fargo Bank	$   33,215.18
	Interest on loan from Fargo Bank	$         196.19
	Cash		$   33,411.37
	(Being Loan from Fargo bank discharged along with interest)
		$   33,411.37	$   33,411.37