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problem 9-1a (algo) short-term notes payable transactions and entries lo p1
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tyrell company entered into the following transactions involving short-term liabilities.
year 1
april 20 purchased $39,500 of merchandise on credit from locust, terms n/30.
may 19 replaced the april 20 account payable to locust with a 90-day, 8%, $35,000 note payable along with paying $4,500 in cash.
july 8 borrowed $54,000 cash from nbr bank by signing a 120-day, 11%, $54,000 note payable.
? paid the amount due on the note to locust at the maturity date.
? paid the amount due on the note to nbr bank at the maturity date.
november 28 borrowed $33,000 cash from fargo bank by signing a 60-day, 8%, $33,000 note payable.
december 31 recorded an adjusting entry for accrued interest on the note to fargo bank.
year 2
? paid the amount due on the note to fargo bank at the maturity date.

problem 9-1a (algo) part 1

required:

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

	locust	nbr bank	fargo bank
maturity date

Explanation:

Step1: Locate the note date for Locust

The note to Locust was issued on May 19, and it has a 90 - day term.
May has 31 days, so from May 19 to May 31, there are \(31 - 19=12\) days.
June has 30 days, so after May, we have used 12 days, and we have \(90 - 12 = 78\) days left.
After June (30 days), we have \(78-30 = 48\) days left.
July has 31 days, so after July, we have \(48 - 31=17\) days left. So the maturity date for Locust is August 17 (since 17 days into August).

Step2: Locate the note date for NBR Bank

The note to NBR Bank was issued on July 8, with a 120 - day term.
July has 31 days, so from July 8 to July 31, there are \(31 - 8 = 23\) days.
August has 31 days, so after July, we have used 23 days, and we have \(120 - 23=97\) days left.
September has 30 days, so after September, we have \(97 - 30 = 67\) days left.
October has 31 days, so after October, we have \(67 - 31 = 36\) days left.
November has 30 days, so after November, we have \(36-30 = 6\) days left. So the maturity date for NBR Bank is November 6.

Step3: Locate the note date for Fargo Bank

The note to Fargo Bank was issued on November 28, with a 60 - day term.
November has 30 days, so from November 28 to November 30, there are \(30 - 28=2\) days.
December has 31 days, so after November, we have used 2 days, and we have \(60 - 2=58\) days left. But December has 31 days, so \(58-31 = 27\) days into January of Year 2. So the maturity date for Fargo Bank is January 27 (of Year 2).

Answer:

	Locust	NBR Bank	Fargo Bank