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
__?__ Paid the amount due on the note to Fargo Bank at the maturity date.

3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. (Do not round intermediate calculations and round your final answer to nearest whole dollar. Use 360 days a year.)

Year End Accrual Required For: Fargo Bank Principal × Rate × Time = Interest Interest to be accrued in Year 1 × % × =

Question

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 
__?__ Paid the amount due on the note to Fargo Bank at the maturity date.
 
3. Determine the interest expense recorded in the adjusting entry at the end of Year 1. (Do not round intermediate calculations and round your final answer to nearest whole dollar. Use 360 days a year.)
 
    Year End Accrual Required For: Fargo Bank Principal × Rate × Time = Interest Interest to be accrued in Year 1 × % × =

Mar 19		Purchased $41,250 worth of merchandise from Chipcom, on credit. Terms: 1/10, n/30.
April 29		Replaced the Mar 19 account payable to Chipcom with a 120-day, $35,000 note at 7% annual interest, plus a cash payment of $6,250.
Jun 16		Borrowed $55,000 cash from Sunnyvale Bank. Signed a 90-day, 8% interest-bearing note, with a $55,000 face value.
?		Paid Chipcom the amount due on the note on the date of maturity.
?		Paid Sunnyvale Bank the amount due on the note on the date of maturity.
Oct 30		Borrowed $18,000 cash from UCB Bank. Signed a 90-day, 7% interest-bearing note, with a $18,000 face value.
Dec 31		Recorded an accrued interest adjustment on the UCB Bank note.

1.	On March 1, 2014, borrowed $48,000 cash from the local bank. The note had a 7 percent interest rate and was due on September 1, 2014.
2.	Cash sales for the year amounted to $225,000 plus sales tax at the rate of 7 percent.
3.	Aliceville provides a 90-day warranty on the merchandise sold. The warranty expense is estimated to be 3 percent of sales.
4.	Paid the sales tax to the state sales tax agency on $200,000 of the sales.
5.	Paid the note due on September 1 and the related interest.
6.	On October 1, 2014, borrowed $50,000 cash from the local bank. The note had a 10 percent interest rate and a one-year term to maturity.
7.	Paid $3,200 in warranty repairs.
8.	A customer has filed a lawsuit against Aliceville for $100,000 for breach of contract. The company attorney does not believe the suit has merit.

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