Tytus Co. entered into the following transactions involving short-term liabiliti
ID: 2352348 • Letter: T
Question
Tytus Co. entered into the following transactions involving short-term liabilities in 2010 and 2011.2010
Apr. 20 Purchased $38,500 of merchandise on credit from Frier, terms are 1y10, ny30. Tytus uses the
perpetual inventory system.
May 19 Replaced the April 20 account payable to Frier with a 90-day, $30,000 note bearing 9% annual
interest along with paying $8,500 in cash.
July 8 Borrowed $60,000 cash from Community Bank by signing a 120-day, 10% interest-bearing
note with a face value of $60,000.
___? ____ Paid the amount due on the note to Frier at the maturity date.
___? ____ Paid the amount due on the note to Community Bank at the maturity date.
Nov. 28 Borrowed $21,000 cash from UMB Bank by signing a 60-day, 8% interest-bearing note with a
face value of $21,000.
Dec. 31 Recorded an adjusting entry for accrued interest on the note to UMB Bank.
2011
___? ____ Paid the amount due on the note to UMB Bank at the maturity date.
Required
1. Determine the maturity date for each of the three notes described
Explanation / Answer
Maturity date Frier Aug. 17
Com. Bank Nov. 5
UMB Jan. 27 2.
Determine the interest due at maturity for each of the three notes. (Use 360 days a year. Do not round your intermediate calculations. Omit the "$" sign in your response.)
Interest due at maturity
Frier $ 675
Com. Bank $ 2,000
UMB $ 280
Determine the interest expense to be recorded in the adjusting entry at the end of 2010. (Enter 0 if no interest is to be accrued. Use 360 days a year. Do not round your intermediate calculations. Omit the "$" sign in your response.)
Accrued interest expense
Frier $0
Com Bank $0
UMB $ 154 Total $ 154
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