Zing Cell Phone Company entered into the following transacti

Zing Cell Phone Company entered into the following transactions involving current liabilities during 2017 and 2018.

Purchased merchandise on credit from Ferris Inc. for $162,000. The terms were 1/10, n/30 (assume a perpetual inventory system).

Zing paid $36,000 cash and replaced the $126,000 remaining balance of the account payable to Ferris Inc. with a 5%, 60-day note payable.

Required:
1. Determine the maturity dates of the three notes just described.

2. Present journal entries for each of the preceding dates. (Use 365 days an year. Round your answers to 2 decimal places.)

1.Record the purchase of merchandise on credit.

2.Record the payment of cash and a note written to exchange due date.

3.Record the borrowing of cash with a 90-day against note.

4.Record the payment of note with interest.

5.Record the payment of note with interest.

6.Record the borrowing of cash with a 120-day note.

7.Record the accrued interest on note payable.

8.Record the payment of note with interest.

	2017
Mar.	14	Purchased merchandise on credit from Ferris Inc. for $162,000. The terms were 1/10, n/30 (assume a perpetual inventory system).
Apr.	14	Zing paid $36,000 cash and replaced the $126,000 remaining balance of the account payable to Ferris Inc. with a 5%, 60-day note payable.
May	21	Borrowed $136,000 from Scotia Bank by signing a 4.5%, 90-day note.
	?	Paid the note to Ferris Inc. at maturity.
	?	Paid the note to Scotia Bank at maturity.
Dec.	15	Borrowed $111,000 and signed a 5.25%, 120-day note with National Bank.
Dec.	31	Recorded an adjusting entry for the accrual of interest on the note to National Bank.
	2018
	?	Paid the note to National Bank at maturity.

Solution

Maturity dates Ferris 13-Jun scotia bank 19-Aug National bank 14-Apr 14-Mar Merchandise 162000               Accounts payable 162000 14-Apr Accounts payable         162000               Cash 36000                Notes payable 126000 21-May Cash 136000           Notes payable 136000 13-Jun Notes payable 126000 Interest expense (126000*5%*60/365) 1035.62               Cash 127035.62 19-Aug Notes payable 136000 Interest expense (136000*4.5%*90/365) 1509.04               Cash 137509.04 15-Dec Cash 111000           Notes payable 111000 31-Dec Interest expense (111000*5.25%*16/365) 255.45            Interest payable 255.45 14-Apr Notes payable 111000 Interest payable 255.45 Interest expense (111000*5.25%*104/365) 1660.44            Cash 112915.89