Exercise 7-11A Accounting for notes receivable LO 7-5

Rainey Enterprises loaned $45,000 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.)