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28 September, 17:03

Apr. 20 Purchased $35,500 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 $500 in cash. July 8 Borrowed $63,000 cash from NBR Bank by signing a 120-day, 10%, $63,000 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. Nov. 28 Borrowed $21,000 cash from Fargo Bank by signing a 60-day, 7%, $21,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.

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  1. 28 September, 17:22
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    April 20

    Dr Inventory 35,500

    Cr Account payable 35,500

    May 19

    Dr account payable 35,500

    Cr cash 500

    Cr note payable 35,000

    Juy 8

    Dr Cash 63,000

    Cr Note payable 63,000

    Aug 17

    Dr Note payable 35,000

    Dr Interest expense 700

    Cr Cash 35,700

    Nov 5

    Dr Note payable 63,000

    Dr Interest expense 1,575

    Cr Cash 64,575

    Nov 28

    Dr Cash 21,000

    Cr Note payable 21,000

    Dec 31

    Dr Interest expense 135

    Cr Interest payable 135

    Jan 27

    Dr Note payable 21,000

    Dr Interest payable 135

    Dr Interest payable 110

    Cr Cash 21,245

    Explanation:

    Adjusting entry for accrued interest on the note to Fargo Bank.

    April 20

    Dr Inventory 35,500

    Cr Account payable 35,500

    May 19

    Dr account payable 35,500

    Cr cash 500

    Cr note payable 35,000

    Juy 8

    Dr Cash 63,000

    Cr Note payable 63,000

    Aug 17

    Dr Note payable 35,000

    Dr Interest expense 700

    (35,000*8%*90/360)

    Cr Cash 35,700

    Nov 5

    Dr Note payable 63,000

    Dr Interest expense 1,575

    (63,000*10%*90/360)

    Cr Cash 64,575

    Nov 28

    Dr Cash 21,000

    Cr Note payable 21,000

    Dec 31

    Dr Interest expense 135

    (21,000*7%*33/360)

    Cr Interest payable 135

    Jan 27

    Dr Note payable 21,000

    Dr Interest payable 135

    Dr Interest payable 110

    (21,000*7*27/360)

    Cr Cash 21,245
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