During 2011 and 2012, Data Resources, Inc. engaged in financial transactions that involved short-term liabilities.

Using the financial transaction information provided below, determine the following.

a.All three note maturity dates.

b.The interest due on all three notes on the dates they mature, assuming a 360-day year.

c.The interest expense for the 2011 year-end adjusting entry.

d.For distinguished performance, determine the interest expense for 2012.

Note:The company uses a perpetual inventory system.

2011

Mar 19

Purchased $41,250 worth of merchandise from Chipcom, on credit. Terms: 1/10, n/30.

April 29

Replaced the Mar 19 account payable to Chipcom with a 120-day, $35,000 note at 7% annual interest, plus a cash payment of $6,250.

Jun 16

Borrowed $55,000 cash from Sunnyvale Bank. Signed a 90-day, 8% interest-bearing note, with a $55,000 face value.

?

Paid Chipcom the amount due on the note on the date of maturity.

?

Paid Sunnyvale Bank the amount due on the note on the date of maturity.

Oct 30

Borrowed $18,000 cash from UCB Bank. Signed a 90-day, 7% interest-bearing note, with a $18,000 face value.

Dec 31

Recorded an accrued interest adjustment on the UCB Bank note.

2012

?

Paid UCB Bank the amount due on the note on the date of maturity.

Chipcom

Sunnyvale Bank

UCB

also Show journal entries for all 2011 and 2012 events and transactions for Data Resources, Inc.

Answer rating: 100% (QA)

Answers a The three note maturity dates are 1 April 29 2011 120day note 2 July 16 2011 90day note 3 ... View the full answer