Question

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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