Question

Problem 11-1A Short-term notes payable transactions and entries LO P1

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

2016

Apr.		20		Purchased $35,500 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 7% annual interest along with paying $500 in cash.
July		8		Borrowed $63,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $63,000.
__?__				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 $24,000 cash from Fargo Bank by signing a 60-day, 6% interest-bearing note with a face value of $24,000.
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.

Problem 11-1A Part 5

5.1 Prepare journal entries for all the preceding transactions and events for 2016. (Do not round your intermediate calculations.)
  

VULC VENIL LIGUIL Apr 20, 2016 gical vUual Merchandise inventory Accounts payable—Locust 35,500 35,500 May 19, 2016 35,500 Accounts payable—Locust Notes payable—Locust Cash 35,000 500 Jul 08, 2016 63,000 Cash Notes payable-NBR Bank 63,000 Aug 17, 2016 Notes payable—Locust Interest expense Cash 000 000 00 00 00 00 35,000 604 34,396 X Nov 05, 2016 Notes payable-NBR Bank Interest expense Cash 63,000 2,278 X 60,722 Nov 28, 2016 24,000 Cash Notes payable-NBR Bank 24,000 Dec 31, 2016 130 X Interest expense Interest payable 130 X

Answer 1

Journal entry

No	Date	account and explanation	Debit	Credit
1	Apr 20	Merchandise inventory	35500
		Account payable-Locust		35500
2	May 19	Account payable-Locust	35500
		Notes payable-Locust		35000
		Cash		500
3	Jul 08	Cash	63000
		Notes payable-NBR Bank		63000
4	Aug 17	Notes payable-Locust	35000
		Interest expense	612.50
		Cash		35612.50
5	Nov 05	Notes payable-NBR Bank	63000
		Interest expense	2310
		Cash		65310
6	Not 28	Cash	24000
		Notes payable-Fargo Bank		24000
7	Dec 31	Interest expense	132
		Interest payable		132

Journal entry

Jan 27,2017	Notes payable -Fargo Bank	24000
	Interest payable	132
	Interest expense	108
	Cash		24240