Question 1: (Total 4 marks: each difference 0.5 mark)

Explain the main differences between a partnership and a corporation forms of an organization. If you decide to create a partnership/corporation, which form do you choose? Explain.

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Question 2: (Total 4 marks)

On September 30, ABC Company borrows $120,000 from Ottawa State Bank by signing a 6-month, 7.25%, interest-bearing note.

Instructions: Prepare the necessary entries below associated with the note payable on the books of ABC Company.

(a) Prepare the journal entry when the note was issued. (1 marks)

(b) Prepare the adjusting entry at December 31 to accrue interest. (1 marks)

(c) Prepare the entry to record payment of the note at maturity date. (2 marks)