Question

Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017 2016 Apr. 20 Purchased $38,500 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 8 annual interest along with paying $3,500 in cash. July 8 Borrowed $66,000 cash from NBR Bank by signing a 120-day. 120 interest-bearing note with a face value of $66,000. __?_ Paid the amount due on the note to Locust at the maturity date. 2 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, 7% 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 7. Paid the amount due on the note to Pargo 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.) Principal X Rate Interest Locust NBR Bank Fargo Bank

Answer 1

2.

Determine the interest due at maturity as follows:

	Principal	x	Rate	x	Time	=	Interest
Locust	35000	x	8%	x	90/360	=	700
NBR Bank	66000	x	12%	x	120/360	=	2640
Fargo Bank	24000	x	7%	x	60/360	=	280