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27 May, 15:51

AP Kelly Jones and Tami Crawford borrowed $15,000 on a 7-month, 8% note from Gem State Bank to open their business, JC's Coffee House. The money was borrowed on June 1, 2022, and the note matures January 1, 2023. Required:

a. Prepare the entry to record the receipt of the funds from the loan.

b. Prepare the entry to accrue the interest on June 30.

c. Assuming adjusting entries are made at the end of each month, determine the balance in the Interest Payable account at December 31, 2022.

d. Prepare the entry required on January 1, 2023, when the loan is paid back.

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  1. 27 May, 16:08
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    Answer:JC Coffee house journal$

    Date

    a. June 1 2022

    Bank Dr. 15,000

    Gem state bank Cr. 15,000

    Narration. Acquisitions of $15,000, 8%, 7c months loan.

    b. June 30, 2022

    Interest Dr 1200

    Gem bank Cr. 1200

    Interest on loan for the month of June

    C. Interest as at December 31 2022

    8% * $15,000*7

    =$8400

    Jan 1 2023

    Gem state bank Dr 23,400

    Bank. Cr. 23,400

    Narration. Payment of $15,000, at 8%, 7 months and associated interest on maturity.
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