Question: The following selected transactions relate to liabilities of Rocky Mountain

The following selected transactions relate to liabilities of Rocky Mountain Adventures. Rocky Mountain’s fiscal year ends on December 31.
January 13 Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the bank’s prime rate.
February 1 Arrange a three-month bank loan of $5 million with First Bank under the line of credit agreement. Interest at the prime rate of 7% is payable at maturity.
May 1 Pay the 7% note at maturity.

Required:
Record the appropriate entries, if any, on January 13, February 1, and May 1.



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  • CreatedJuly 15, 2014
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