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Problem 11-1A

# Problem 11-1A - Problem 11-1A(45 minutes Locust 1 Natl Bank...

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Problem 11-1A (45 minutes) Locust Natl. Bank Fargo 1. Maturity dates Date of the note ........................ May 19 July 8 Nov. 28 Term of the note (in days) ....... 120 120 60 Maturity date ............................. Sept. 16 Nov. 5 Jan. 27 2. Interest due at maturity Principal of the note ................. \$ 39,000 \$120,000 \$60,000 Annual interest rate ................. 9% 8.5% 8% Fraction of year ........................ 120/360 120/360 60/360 Interest expense ....................... \$ 1,170 \$ 3,400 \$ 800 3. A ccrued interest on Fargo note at the end of 2008 Total interest for note .................................................... \$ 800 Fraction of term in 2008 ................................................. 33/60 Accrued interest expense ............................................. \$ 440 4. Interest on Fargo note in 2009 Total interest for note .................................................... \$ 800 Fraction of term in 2009 ................................................. 27/60 Interest expense in 2009 ................................................ \$ 360

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Problem 11-1A (Concluded) 5. 2008 Apr. 20 Merchandise Inventory ......................................... 48,250 Accounts Payable Locust ....................... 48,250 Purchased merchandise on credit. May 19 Accounts Payable Locust ................................. 48,250 Cash ............................................................ 9,250 Notes Payable Locust ............................. 39,000 Paid \$9,250 cash and gave a 120-day,
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Problem 11-1A - Problem 11-1A(45 minutes Locust 1 Natl Bank...

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