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

Question

Tyrell Co. entered into the following transactions involving short-term liabilities in 2015 and 2016. 2015 Apr. 20 Purchased $38,000 of merchandise on credit from Loco, terms n/30. Tyrell uses the perpetual inventory system. May 19 Replaced the April 20 account payable to Loco with a 90-day, $35,000 note bearing 8% annual interest along with paying $3,000 in cash. July 8 Borrowed $66,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $66,000. booring Paigroweas sec.00 csk bysigning 20 doy1Ts ?Paid the amount due on the note to Loco at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $30,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face value of $30,000. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. 2016 Paid the amount due on the note to Fargo Bank at the maturity date

Explanation / Answer

Journal entries Date Accounting titles & Explanations Debit Credit 20-Apr inventory 38,000 Accounts payable 38,000 19-May Accounts payable 38,000 cash 3,000 notes payable 35,000 8-Jul Cash 66,000 notes payable 66,000 17-Aug notes payable 35,000 interest expense 700 cash 35,700 5-Nov notes payable 66,000 interest expense 2,420 cash 68,420 28-Nov Cash 30,000 notes payable 30,000 31-Dec interest expense 220 interest payable 220 2017 27-Jan notes payable 30,000 interest payable 220 interest expense 180 cash 30,400

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