Refer to the information for Darby Corporation in E13.2.

Instructions

a. Prepare the journal entries for the payment of the notes at maturity. Assume no other accruals of interest were recorded since the December 31, 2023 year end.

b. Repeat part (a) assuming Darby uses reversing entries. (Show the reversing entries at January 1, 2024.) Would the use of reversing entries be efficient for both types of notes?

Data from in E13.2

The following are selected 2023 transactions of Darby Corporation.

Sept. 1 Purchased inventory from Orion Ltd. on account for $50,000. Darby uses a periodic inventory system.

Oct. 1 Issued a $50,000, 12-month, 8% note to Orion in payment of Darby’s account.

1 Borrowed $75,000 from the bank by signing a 12-month, non–interest-bearing $81,000 note.