Chapter $7-$ Homework

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

Required

a$.$ Record these general journal entries for Rainey Enterprises:

The loan to Small Company.

The adjusting entry at December $31,$ Year $1.$

The adjusting entry and collection of the note on June $1,$ Year $2.$

b$.$ Show the effects of the three given transactions in a horizontal statements model.

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Required B

Show the effects of the three given transactions in a horizontal statements model.

Note: In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing affected by the event. Enter any decreases to account balances and cash outflows with a minus sign. Round your final answers to the ne