Financial Accounting Principles Assignment During 2011 and 2012, Data Resources, Inc. engaged in financial transactions that involved
short-term liabilities.
Using the financial transaction information provided below, determine the following. Record your
responses on page 2.
All three note maturity dates.
The interest due on all three notes on the dates they mature, assuming a 360-day year.
The interest expense for the 2011 year-end adjusting entry.
For distinguished performance, determine the interest expense for 2012.
Note: The company uses a perpetual inventory system.
2011
Mar 19 Purchased $41,250 worth of merchandise from Chipcom, on credit. Terms: 1/10, n/30.
April 29 Replaced the Mar 19 account payable to Chipcom with a 120-day, $35,000 note at 7%

annual interest, plus a cash payment of $6,250.

Jun 16 Borrowed $55,000 cash from Sunnyvale Bank. Signed a 90-day, 8% interest-bearing note,

with a $55,000 face value.
? Paid Chipcom the amount due on the note on the date of maturity.
? Paid Sunnyvale Bank the amount due on the note on the date of maturity.
Oct 30 Borrowed $18,000 cash from UCB Bank. Signed a 90-day, 7% interest-bearing note, with a

$18,000 face value.

Dec 31 Recorded an accrued interest adjustment on the UCB Bank note.
2012
? Paid UCB Bank the amount due on the note on the date of maturity.

Chipcom

Sunnyvale
Bank UCB

[Record your answers to item 1 here.]

Financial Accounting Principles Assignment

2
Prepare journal entries for all 2011 and 2012 events and transactions for Data Resources, Inc.
Exercise 4-2
On January 1, 2012, Fromer issued $3,000,000 of 12-year, 7 percent bonds. Interest is paid
semi-annually on June 30 and December 31. The issue price was $2,592,000.
Prepare the January 1, 2012, journal entry that records the bond issue.

Compute the following for each semi-annual period:
Cash payment.
Straight-line discount amortization.
Interest expense. Financial Accounting Principles Assignment

2
Prepare journal entries for all 2011 and 2012 events and transactions for Data Resources, Inc.
Exercise 4-2
On January 1, 2012, Fromer issued $3,000,000 of 12-year, 7 percent bonds. Interest is paid
semi-annually on June 30 and December 31. The issue price was $2,592,000.
Prepare the January 1, 2012, journal entry that records the bond issue.

Compute the following for each semi-annual period:
Cash payment.
Straight-line discount amortization.
Interest expense. Financial Accounting Principles Assignment

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