On May 1, 2024, Jennifer Fashions borrowed $90,000 at a bank by signing a four-year, 6%...

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On May 1, 2024, Jennifer Fashions borrowed $90,000 at a bank by signing a four-year, 6% loan. The terms of the loan require equal principal payments of $22,500 and accrued interest at 6% due annually on April 30. The loan agreement requires the company to maintain a minimum current ratio of 2.0. The December 31, 2024, year-end statement of financial position, immediately prior to the reclassification of long-term debt, follows: Current assets $110,250 Current liabilities $45,000 Non-current assets 159,750 Loan payable 90,000 Common shares 67,500 Retained earnings 67,500 Total assets $270,000 Total liabilities and shareholders' equity $270,000 (a) Your answer is correct. Does Jennifer Fashions comply with the bank's current ratio requirement prior to recording the accrued interest and reclassification of the current portion of the long-term loan? (Round answer to 2 decimal places, eg. 1.20.) Current ratio 2.45 Jennifer Fashions meets the bank's minimum current ratio.. Prepare journal entries to record the interest payable on December 31, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Interest Expense Interest Payable eTextbook and Media List of Accounts Debit 3600 Credit 3600 Attempts: 1 of 2 used (c) Prepare the journal entries to reclassify the portion of the long-term loan as current. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit (d) Your answer is incorrect. Does Karen Fashions breach the bank's current ratio requirement after preparing the journal entries above? (Round answer to 2 decimal places, e.g. 1.25.) Current ratio 2.53 Karen Fashions does not meet the bank's minimum current ratio. On May 1, 2024, Jennifer Fashions borrowed $90,000 at a bank by signing a four-year, 6% loan. The terms of the loan require equal principal payments of $22,500 and accrued interest at 6% due annually on April 30. The loan agreement requires the company to maintain a minimum current ratio of 2.0. The December 31, 2024, year-end statement of financial position, immediately prior to the reclassification of long-term debt, follows: Current assets $110,250 Current liabilities $45,000 Non-current assets 159,750 Loan payable 90,000 Common shares 67,500 Retained earnings 67,500 Total assets $270,000 Total liabilities and shareholders' equity $270,000 (a) Your answer is correct. Does Jennifer Fashions comply with the bank's current ratio requirement prior to recording the accrued interest and reclassification of the current portion of the long-term loan? (Round answer to 2 decimal places, eg. 1.20.) Current ratio 2.45 Jennifer Fashions meets the bank's minimum current ratio.. Prepare journal entries to record the interest payable on December 31, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Interest Expense Interest Payable eTextbook and Media List of Accounts Debit 3600 Credit 3600 Attempts: 1 of 2 used (c) Prepare the journal entries to reclassify the portion of the long-term loan as current. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit (d) Your answer is incorrect. Does Karen Fashions breach the bank's current ratio requirement after preparing the journal entries above? (Round answer to 2 decimal places, e.g. 1.25.) Current ratio 2.53 Karen Fashions does not meet the bank's minimum current ratio.