Rainey Enterprises loaned $40,000 to Small Co. on June 1, 2016, for one year at 8 percent interest.

Required

a. Record these general journal entries for Rainey Enterprises: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.)

(1) The loan to Small Co.

(2) The adjusting entry at December 31, 2016.

(3) The adjusting entry and collection of the note on June 1, 2017.

b. Show the effects of the three above transactions in a horizontal statements model like the one shown below. (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign. Round your final answers to the nearest whole dollar.)

Transcribed Image Text:

View transaction list Journal entry worksheet < 1 2 Date 06/01/2016 3 Record entry for loan provided to small Co. for one year at 8 percent interest. Note: Enter debits before credits. Record entry 4 General Journal Clear entry Debit Credit View general journal > Event Cash Assets Balance Sheet Note Rec. + Int. Rec. Liab. + Equity Ret. Ear. Income Statement Revenue Expense Net Income Cash Flows View transaction list Journal entry worksheet < 1 2 Date 06/01/2016 3 Record entry for loan provided to small Co. for one year at 8 percent interest. Note: Enter debits before credits. Record entry 4 General Journal Clear entry Debit Credit View general journal > Event Cash Assets Balance Sheet Note Rec. + Int. Rec. Liab. + Equity Ret. Ear. Income Statement Revenue Expense Net Income Cash Flows

Answer rating: 100% (QA)

1 Date Title Debit Credit 06012016 Note receivable 40000 ... View the full answer