Question

year 1
april 20 purchased $53,250 of merchandise on credit from wilson, terms n/30.
may 19 replaced the april 20 account payable to wilson with a 90 - day, 6%, $37,000 note payable along with paying $16,250 in cash.
july 8 borrowed $87,000 cash from nmr bank by signing a 120 - day, 6%, $87,000 note payable.
august 17 paid the amount due on the note to wilson at the maturity date.
november 5 paid the amount due on the note to nmr bank at the maturity date.
november 28 borrowed $81,000 cash from rochester bank by signing a 60 - day, 12%, $81,000 note payable.
december 31 recorded an adjusting entry for accrued interest on the note to rochester bank.
year 2
january 27 paid the amount due on the note to rochester bank at the maturity date.
requirement general journal general ledger trial balance schedule of payables calculation of interest year 2 payment
enter the principal amount, interest rate, and number of days of interest to be recorded for each note. verify that interest expense agrees with your journal entries and the trial balance.
king company
calculation of interest expense
august 17 - wilson note:
principal
interest rate
number of days interest to be recorded in year 1

Explanation:

Step1: Identify Wilson note details

Principal = $37,000, Interest rate = 6%, Note - term = 90 days, Date issued = May 19, Year - end = December 31.

Step2: Calculate number of days from issue to Year - end

May has 31 days, so from May 19 to May 31 is 31 - 19=12 days. June has 30 days, July has 31 days, August has 17 days (up to the maturity date). Total days from May 19 to August 17 is 12 + 30+31 + 17=90 days. Since the note matures on August 17 in Year 1, the number of days' interest to be recorded in Year 1 is 90 days.

Answer:

Principal: $37,000
Interest rate: 6%
Number of days' interest to be recorded in Year 1: 90