Score:Score: 20/20 Points 100 %
[The following information applies to the questions displayed below.]
Tyrell Co. entered into the following transactions involving short-term liabilities.
Year 1Year 1
Apr. 20 Purchased $38,500 of merchandise on credit from Locust, terms n/30.
May 19 Replaced the April 20 account payable to Locust with a 90-day, 8%, $35,000 note payable along with paying $3,500 in cash.
July 8 Borrowed $63,000 cash from NBR Bank by signing a 120-day, 11%, $63,000 note payable.
__?__ Paid the amount due on the note to Locust at the maturity date.
__?__ Paid the amount due on the note to NBR Bank at the maturity date.
Nov. 28 Borrowed $33,000 cash from Fargo Bank by signing a 60-day, 7%, $33,000 note payable.
Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.
Year 2Year 2
__?__ Paid the amount due on the note to Fargo Bank at the maturity date.
3. Award: 1.53 out of 1.53 points1.53 out of 1.53 points
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. (Do not round your intermediate
calculations. Use 360 days a year.)
Year End Accrual Required
For: Fargo Bank
Principal x Rate x Time = Interest
Interest to be accrued in Year 1 $33,000 !x7!%x
33/360 !
=$212 !
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. (Do not round your intermediate
calculations. Use 360 days a year.)
$+/-1$
Year End Accrual Required For: Fargo Bank
Principal x Rate x Time = Interest
Interest to be accrued in Year 1 33,000 x 7 %x33/360 =212
Explanation:
Accrued interest on Fargo note at the end of Year 1
Total interest for note $ 385
Fraction of term in Year 1 33/60
Accrued interest expense $212
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