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 $156,000. The terms were 1/10, n/30. (assume a perpetual inventory system). 

Apr. 14 Zing paid $33,000 cash and replaced the $123,000 remaining balance of the account payable to Ferris Inc. with a 5%, 60-day note payable.

May 21 Borrowed $133,000 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 $108,000 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. 

2. Present journal entries for each of the preceding dates. 
   

Answer 1

The answer has been presented in the supporting sheet. The maturity date and interest calculations has been presented in the supporting sheet in detailed manner. All the journal enteries has also been presented in the supporting sheet.

DATE LA e Mah Cummulahive 2013 May 2013 3 1 13 Hena 3 Tune 2012 2. Cana Bank Note! 2013 0 May 2013 312alo 2-1 a o L9

DATE PAGE No. ote Patable M 15 Dec 20 ±12 Iy ApRiL 2012 Momth otal 31-1S 31 28 3 t ly Tan 2018 Eeb 20 18 43 35 Ope 2o8 Mahunit Dates Nok -4blaka, 2017 19 ly Matura

DATE PAGE No. เช่ Credit R. Cash Alc Lc -To ke May 2l mok Payable A Scahis Bank 123000 ay 12 4olo-96 Cash Al

Answer 2

1)	Maturity date
		Ferris Inc.	Scotia Bank	National Bank
	Date of the note	14-Apr	21-May	15-Dec
	term of note	60	90	120
	maturity date	13-Jun	19-Aug	14-Apr

Journal entries
Date	Accounting titles & Explanations	Debit($)	Credit($)
2017
14-Mar	inventory	1,56,000
	Accounts payable		1,56,000
14-Apr	Accounts payable	1,56,000
	cash		33,000
	notes   payable		1,23,000
21-May	Cash	1,33,000
	notes   payable		1,33,000
13-Jun	notes payable	1,23,000
	interest expense (123,000*5%*60/365)	1,010.96
	cash		1,24,010.96
19-Aug	notes payable	1,33,000
	interest expense(133,000*4.5%*90/365)	1,475.75
	cash		1,34,475.75
15-Dec	Cash	1,08,000
	notes   payable		1,08,000
31-Dec	interest expense(108,000*5.25%*16 days /365)	248.55
	interest   payable		248.55
2018
14-Apr	notes payable	1,08,000
	interest payable	248.55
	interest expense(108,000*5.25%*104 days /365)	1,615.56
	cash		1,09,864.11