Required information [The following information applies to the questions displayed below] Tyrell...

Question:

Required information The following information applies to the questions displayed below

Tyrell Co entered into the following transactions involving short-term liabilities in 2016 and 201 2016

Apr. 28 Purchased $38,000 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system
May 19 Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 8% annual interest along with paying $3,00 in cash. $57,000.
Paid the amount due on the note to NBR Bank at the maturity date. $27,00e. Duly
8 Borrowed $57,00e cash from NBR Bank by signing a 120-day, 113 interest-bearing note with a face value of Paid the amount due on the note to Locust at the maturity date.
Nov. 28 Borrowed $27,000 cash from Fargo Bank by signing 60-day, 7% interest-bearing note with a face value of Dec.
31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. 2017
Paid the amount due on the note to Fargo Bank at the maturity date.

Required:

1. Determine the maturity date for each of the three notes described.

Maturity date
NBR Bank
Fargo Bank
Locust

Notes Payable:

Notes are written promises to pay amounts owed at a later date. Notes are characterized by their principal values, which must be repaid upon maturity, and typically their interest rates, which determine the interest to be paid on the principal. Additionally, notes typically have longer terms compared to accounts payable.

Answer and Explanation:

Maturity date Explanation
NBR Bank November 8 On July 8, a four month note was signed. Counting forward four month from this date, the maturity date is Nov. 8.
Fargo Bank January 28 On November 28, a two month note was signed. Counting forward two months from this date, the maturity date is Jan. 28.
Locust August 19 On May 19, the original note was replaced with another 3 month note. Counting three months forward from this date, the maturity date is Aug. 19.

Learn more about this topic:

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Long-Term Debt: Definition, Cost & Formula

from Financial Accounting: Help and Review

Chapter 8 / Lesson 7
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