Exercise 4-1

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

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.

1.Prepare journal entries for all 2011 and 2012 events and transactions for Data Resources, Inc.