Missing information:
Amount paid to Locust (interest + principal)
Amount paid to NBR bank (interest + principal)
Answer:
Amount paid to Locust
- interest = $604.11
- principal = $35,000
- total = $35,604.11
Amount paid to NBR bank
- interest = $2,169.86
- principal = $60,000
- total = $62,169.86
Explanation:
Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.
April 20, 2016 Purchased $38,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system.
Dr Merchandise inventory 38,000
Cr Accounts payable 38,000
May 19, 2016, replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 7% annual interest along with paying $3,000 in cash.
Dr Accounts payable 38,000
Cr Cash 3,000
Cr Notes payable 35,000
August 17, 2016, paid the note to Locust with interest ($35,000 x 7% x 90/365)
Dr Notes payable 35,000
Dr Interest expense 604.11
Cr Cash 35,604.11
July 8. 2016, borrowed $60,000 cash from NBR Bank by signing a 120-day, 11% interest-bearing note with a face value of $60,000.
Dr Cash 60,000
Cr Notes payable 60,000
November 5, 2016, paid the note to NBR Bank with interest ($60,000 x 11% x 120/365)
Dr Notes payable 60,000
Dr Interest expense 2,169.86
Cr Cash 62,169.86
