Purchased $40,250 of merchandise on credit from Locust, terms are 1/10, n/30. Tyrell uses the perpetual inventory system. 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. Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face value of $42,000. references Prepare journal entries for all the preceding transactions and events for years 2012. * Record the purchased merchandise on credit from Locust * Record the account payable * Record the interest-bearing * Record the amount paid on the note to Locust * Record the amount paid on the Note to National Bank * Record the borrowed cash from Fargo Bank * Record the adjusting entry Prepare journal entries for all the preceding transactions and events for years 2013. * Record the amount due on the note to Fargo Bank Solution Date Account head Debit $ Credit $ 2012 Apr. 20   Purchase a/c 40250 Accounts payable - Locust 40250 Purchase of merchandise from Locust , terms 1/10, n/30 accounted May 19   Accounts payable - Locust 35000 Note payable 35000 Amount borrowed @ 10% annual cost for 90 days to repay locust accounted May 19   Accounts payable - Locust 5250 Cash 5250 Cash paid to Locust in settlement of April 20 purchase accounted July 8 Cash/Bank a/c 80000 Notes payable - National Bank 80000 9% interest note for 120 days borrowed 16-Aug Notes payable 35000 Interest on notes payable @ 10% p.a. for 90 days 863 Cash/Bank a/c 35863 Paid 90 day notes payable @ 10%p.a. borrowed on May 19) 04-Nov Notes payable - National Bank 80000 Interest on notes payable -National Bank 2367 Cash/Bank a/c 82367 Amount borrowed @ 9% for 120 days from National Bank settled Nov. 28 Cash/Bank a/c 42000 Notes Payable - Fargo bank 42000 Amount borrowed on notes payable @ 8% pa.a for 60 days 31-Dec Interest - Fargo bank 313 Interest payable - Fargo bank 313 Interest accured @ 8% on 42000 for 34 days accrued 2013 26-Jan Notes Payable - Fargo bank 42000 Interest payable - Fargo bank 313 Interest (for balance 26 days) 239 Cash/Bank a/c 42552 Settled notes payableto Fargo bank along with interest on maturity date .

1. Purchased $40,250 of merchandise on credit from Locust, terms are 1/10, n/30. Tyrell uses the
perpetual inventory system.
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.
Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a
face value of $42,000.
references
Prepare journal entries for all the preceding transactions and events for years 2012.
* Record the purchased merchandise on credit from Locust
* Record the account payable
* Record the interest-bearing
* Record the amount paid on the note to Locust
* Record the amount paid on the Note to National Bank
* Record the borrowed cash from Fargo Bank
* Record the adjusting entry
Prepare journal entries for all the preceding transactions and events for years 2013.
* Record the amount due on the note to Fargo Bank
Tyrell Co. entered into the following transactions involving short-term liabilities in 2012 and
2013.
Solution

2. Date Account head Debit $ Credit $ 2012 Apr. 20Â Â Purchase a/c 40250 Accounts payable -
Locust 40250 Purchase of merchandise from Locust , terms 1/10, n/30 accounted May 19Â Â
Accounts payable - Locust 35000 Note payable 35000 Amount borrowed @ 10% annual cost for
90 days to repay locust accounted May 19Â Â Accounts payable - Locust 5250 Cash 5250 Cash
paid to Locust in settlement of April 20 purchase accounted July 8 Cash/Bank a/c 80000 Notes
payable - National Bank 80000 9% interest note for 120 days borrowed 16-Aug Notes payable
35000 Interest on notes payable @ 10% p.a. for 90 days 863 Cash/Bank a/c 35863 Paid 90 day
notes payable @ 10%p.a. borrowed on May 19) 04-Nov Notes payable - National Bank 80000
Interest on notes payable -National Bank 2367 Cash/Bank a/c 82367 Amount borrowed @ 9%
for 120 days from National Bank settled Nov. 28 Cash/Bank a/c 42000 Notes Payable - Fargo
bank 42000 Amount borrowed on notes payable @ 8% pa.a for 60 days 31-Dec Interest - Fargo
bank 313 Interest payable - Fargo bank 313 Interest accured @ 8% on 42000 for 34 days accrued
2013 26-Jan Notes Payable - Fargo bank 42000 Interest payable - Fargo bank 313 Interest (for
balance 26 days) 239 Cash/Bank a/c 42552 Settled notes payableto Fargo bank along with
interest on maturity date