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Required information

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

Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.

2016

2017

4. Determine the interest expense to be recorded in 2017. (Do not round your intermediate calculations. Use 360 days a year.)

Year End Accrual Required For:Fargo BankPrincipalxRatexTime=InterestInterest to be recorded in 2017x%x=

Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms 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 10% annual interest along with paying $5,250 in cash. July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9% interest-bearing note with a face value of $80,000. ___?___ 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 $42,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face value of $42,000. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.

Explanation / Answer

Year End Accrual Required For: Fargo Bank Principal Rate Time Interest Interest to be recorded in 2017 42000 8% 27/360 252

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