Exercise $7-11$A $($Static$)$ Accounting for notes receivable LO $7-5$

Rainey Enterprises loaned $$20,000$ to Small Company on June $1,$ Year $1,$ for one year at $6$ percent interest.

Required:

Show the effects of the following transactions in a horizontal statements model.

Note: Enter any decreases to account balances and cash outflows with a minus sign. For changes on the Statement of Cash

Flows, indicate whether the item is an operating activity $($OA$),$ investing activity $($IA$),$ or financing activity $($FA$).$ Not all cells require

input. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.

$(1)$ The loan to Small Company

$(2)$ The adjustment at December $31,$ Year $1.$

$(3)$ The adjustment and collection of the note on June $1,$ Year $2.$