Aussie Bakery Ltd is an Australian based bakery. The company's balance sheet date is 31 December. On

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Question:

Aussie Bakery Ltd is an Australian based bakery. The company's balance sheet date is 31 December. On the 1st of September 2022, the company approached a bank for a business expansion loan. After evaluating the proposal, the bank approved and disbursed a loan of $50,000 at an annual interest rate of 8%. The terms of the loan required Aussie Bakery Ltd to pay the interest monthly and to repay the principal after 5 years.

Required:

(a) What are the implications for Aussie Bakery Ltd's Balance Sheet, Income Statement, and Cash Flow Statement on receiving the loan on the 1s of September 2022?

(b) How do the Balance Sheet, Income Statement, and Cash Flow Statement of Aussie Bakery Ltd change when it pays the first interest payment on the 30th of September 2022?

(c) How would the financial statements (Balance Sheet, Income Statement, and Cash Flow Statement) change if Aussie Bakery Ltd decided to repay the entire loan prematurely on the 15 of December 2022?