The January 1, 2016 trial balance for the Taylor company isfound on the trial balance tab. The beginning balances are assumed.Perry Co. entered into the following transactions involvingshort-term liabilities in 2016 and 2017. (use 360 days a year).
2016
Apr. 20 Purchased $46,750 of merchandise on credit from Parker,terms are n/30. Perry uses the perpetual inventory system.
May 19 Replaced the April 20 account payable to Parker with a90-day, $36,000 note bearing 10% annual interest along with paying$10,750 in cash.
July 8 Borrowed $84,000 cash from AKR Bank by signing a 120-day,10% interest-bearing note with a face value of $84,000.
Aug 17 Paid the amount due on the note to Parker at the maturitydate.
Nov 5 Paid the amount due on the note to AKR Bank at thematurity date.
Nov 28 Borrowed $81,000 cash from Chicago Bank by signing a60-day, 8% interest-bearing note with a face value of $81,000.
Dec 31 Recorded an adjusting entry for accrued interest on thenote to Chicago Bank.
2017
Jan 27 Paid the amount due on the note to Chicago Bank at hematurity date.
Requirement
General Journal tab-Prepare the 2016 journal entries related tothe notes and accounts payable of Perry Co.
Calculation of interest tab-Use the interest formula (P x R x T)to verify the amount of interest recorded in your entries.
2017 payment tab- Prepare the January 27, 2017 entry to recordthe repayment of the note at maturity.
