[The following information applies to the questions displayed below.] Tyrell Co.

Question

[The following information applies to the questions displayed below.]

Tyrell Co. entered into the following transactions involving short-term liabilities in 2014 and 2015.

   

Purchased $38,500 of merchandise on credit from Locust, terms are 1/10, n/30. Tyrell uses the perpetual inventory system.

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.

Borrowed $51,000 cash from National Bank by signing a 120-day, 12% interest-bearing note with a face value of $51,000.

Borrowed $21,000 cash from Fargo Bank by signing a 60-day, 9% interest-bearing note with a face value of $21,000.

   

4.

value:
16.70 points

Required information

Prepare journal entries for all the preceding transactions and events for years 2014. (Do not round your intermediate calculations.)

Tyrell Co. entered into the following transactions involving short-term liabilities in 2014 and 2015.

Explanation / Answer

Journal entries for 2014

interest expense

*(35000×8%×90/360=700)

**(51000×12%×120/360=2040

***(21000×9%×33/360=173.25)

Date account title debit credit 2014 April 20 merchandise inventory 38500 Account payable 38500 May 19 Account payable 38500 Notes payable 35000 Cash 3500 July 8 cash 51000 Notes payable 51000 Aug 17 Notes payable 35000 Interest expense 700* Cash 35700 Nov 5 Notes payable 51000 Interest expense 2040** Cash 53040 Nov 28 cash 21000 Notes payable 21000 Dec 31

interest expense

173.25 Interest payable 173.25***

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