Ch 09 Gl. P9-1a
1
GL901 - Based on Problem 9-1A LO C2, P1
15
points
The January 1, Year 1 trial balance for the Perry Company is found on the trial balance tab. The beginning balances are assumed.
North Co. entered into the following transactions involving short-term liabilities. (Use 360 days a year.)
Year
1
Apr. 20 Purchased $53,750 of merchandise on credit from Garcia, terms n/30.
May 19 Replaced the April 20 account payable to Garcia with a 90-day, 10%, $38,000 note payable along with paying
$15,750 in cash.
July 17 Borrowed $90,000 cash from AKR Bank by signing a 120-day, 9%, $90,000 note payable.
Aug. 17 Paid the amount due on the note to Garcia at the maturity date.
Nov. 5 Paid the amount due on the note to AKR Bank at the maturity date.
Nov. 28 Borrowed $45,000 cash from Albany Bank by signing a 60-day, 8%, $45,000 note payable.
Dec. 31 Recorded an adjusting entry for accrued interest on the note to Albany Bank.
Year
2
Jan. 27 Paid the amount due on the note to Albany Bank at the maturity date.
Requirement
General
Journal
General
Ledger
Trial Balance
Schedule of
Payables
Calculation of
Interest
Year 2
payment
General Journal tab - Prepare the Year 1 journal entries related to the notes and accounts payable of North Co.
Calculation of Interest tab - Use the interest formula (P x R x T) to verify the amount of interest recorded in your entries.
Verify that total interest expense agrees with the trial balance.
Year 2 payment tab - Prepare the January 27, Year 2 entry to record the repayment of the note at maturity.
General Journal >
