Montag Co. entered into the following transactions involving short-term liabilities in 2...

Montag Co. entered into the following transactions involving short-term liabilities in 2008 and 2009.

2008

Apr. 20 Purchased $48,250 of merchandise on credit from Locust, terms are 1/10, n/30. Montag uses

the perpetual inventory system.

May 19 Replaced the April 20 account payable to Locust with a 120-day, $39,000 note bearing 9%

annual interest along with paying $9,250 in cash.

Required

1. Determine the maturity date for each of the three notes described.

2. Determine the interest due at maturity for each of the three notes. (Assume a 360-day year.)

3. Determine the interest expense to be recorded in the adjusting entry at the end of 2008.

4. Determine the interest expense to be recorded in 2009.

5. Prepare journal entries for all the preceding transactions and events for years 2008 and 2009.