[The following information applies to the questions displayed below.]
 
Tyrell Company entered into the following transactions involving short-term liabilities.
 
Year 1

April 20 Purchased $39,000 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 $4,000 in cash. July 8 Borrowed $60,000 cash from NBR Bank by signing a 120-day, 12%, $60,000 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. November 28 Borrowed $36,000 cash from Fargo Bank by signing a 60-day, 8%, $36,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.

 
Year 2
 

. Determine the interest due at maturity for each of the three notes. (Do not round intermediate calculations and round your final answer to nearest whole dollar. Use 360 days a year.)

    Principal × Rate × Time = Interest Locust × % × = NBR Bank × % × = Fargo Bank × % × =

Exercise 4-1

During 2011 and 2012, Data Resources, Inc. engaged in financial transactions that involved short-term liabilities.

1. Using the financial transaction information provided below, determine the following.

a. All three note maturity dates.

b. The interest due on all three notes on the dates they mature, assuming a 360-day year.

c. The interest expense for the 2011 year-end adjusting entry.

d. For distinguished performance, determine the interest expense for 2012.

Note: The company uses a perpetual inventory system.

2011

2012

During the fiscal year ended December 31, Swanson Corporationengaged in the following transactions involving notes payable: Aug.6 Borrowed $12,000 from Maple Grove Bank, signing a 45-day, 12percent note payable. Sept. 16 Purchased office equipment fromSeawald Equipment. The invoice amount was $18,000, and Seawaldagreed to accept, as full payment, a 10 percent, three-month notefor the invoice amount. Sept. 20 Paid Maple Grove Bank the noteplus accrued interest. Nov. 1 Borrowed $250,000 from Mike Swanson,a major corporate stockholder. The corporation issued Swanson a$250,000, 15 percent, 90-day note payable. Dec. 1 Purchasedmerchandise inventory in the amount of $5,000 from GathmanCorporation. Gathman accepted a 90-day, 14 percent note as fullsettlement of the purchase. Swanson Corporation used a perpetualinventory system. Dec. 16 The $18,000 note payable to SeawaldEquipment matured today. Swanson paid the accrued amount on thisnote and issues a new 30-day, 16 percent note payable in the amountof $18,000 to replace the note that matured. Prepare the adjustingentry needed at Dec. 31, prior to closing the accounts. Use oneentry for all three notes (round to the nearest dollar)

2. Current liabilities: entries anddisclosure. A review of selected financial activities ofVisconti%u2019s during 2000 disclosed the following:<?xml:namespace prefix = o ns ="urn:schemas-microsoft-com:office:office" />

Instructions

a. Prepare journal entries to record thetransactions.

b. Prepare adjusting entries on December 31to record accrued interest for each of the notes payable.