Tyrell Co. entered into the following transactions involving short-term liabilit

Question

Tyrell Co. entered into the following transactions involving short-term liabilities in 2012 and 2013. 2012 Apr. 20 Purchased $38,000 of merchandise on credit from Locust, terms are 1/10, 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 9% annual interest along with paying $3,000 in cash. July 8 Borrowed $63,000 cash from National Bank by signing a 120-day, 10% 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 National Bank at the maturity date. Nov. 28 Borrowed $27,000 cash from Fargo Bank by signing a 60-day, 6% interest-bearing note with a face value of $27,000. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. 2013 __?__ Paid the amount due on the note to Fargo Bank at the maturity date

Explanation / Answer

Amount paid to Locust

Amount paid to National Bank on Maturity = 63000+(63000*10%*120/365) = $ 65071.23

Amount paid to Fargo Bank = 27000+(27000*6%*60/365) = $ 27266.30

Date Particulars Value Amount settled Apr-10 Purchase 38000 Apr-20 Cash 3000 Apr-20 Note @ 9% 35000 Aug-19 Note Settled 35787.5

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