Question

The January 1, 2016 trial balance for the North Company is found on the trial balance tab. The beginning balances are assumed King Co. entered into the following transactions involving short-term liabilities in 2016 and 2017. (Use 360 days a year.) 2016 Apr. 20 Purchased $46,250 of merchandise on credit from Turner, terms are n/30. King uses the perpetual inventory system with paying $7,250 in cash. $117,000 May 19 Replaced the April 20 account payable to Turner with a 90-day, $39,000 note bearing 8% annual interest along July 8 Borrowed $117,000 cash from NMR Bank by signing a 120-day, 9% interest-bearing note with a face value of Aug. 17 Paid the amount due on the note to Turner at the maturity date Nov 5 Paid the amount due on the note to NMR Bank at the maturity date Nov. 28 Borrowed $78,000 cash from Fargo Bank by signing a 60-day, 10% interest-bearing note with a face value of $78,000 Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank 2017 Jan. 27 Paid the amount due on the note to Fargo Bank at the maturity date. General Journal General Ledger Schedule of Payables Calculation of 2017 payment Requirement Trial Balance Interest Prepare the journal entries related to notes and accounts payable. Hint: Use the "Calculation of Interest" tab to ensure the accuracy of your entries View transaction list View journal entry worksheet Date Account Title Debit Credit Apr 20 Merchandise inventory 46,250 Accounts payable Turner 46,250 2 May 19 Accounts payable Turner 46,250 7,250 39,000 as Notes payable - Turner Jul 08 as 117,000

Answer 1

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