## Loan Transaction JournalizationOn June 1, Taci Company lent $86,200 to L. Kaler on a 90-day, 2% note.### Instructions for Journal Entries:1. **Loan Lending Journal Entry**: - **Date**: June 1 - **Transaction**: Record the lending of the money by Taci Company using the correct accounts. - **Format**: Debits must be recorded first, followed by credits. - **Explanation**: Include an explanation on the last line of the journal entry. - Use a 365-day year for calculations concerning notes.### Table for Journalizing Transactions:- **Column Headers**: Date, Accounts and Explanation, Debit, Credit- **Entry Example**: On June 1, you will need to fill in the accounts involving the note and its principal amount, with respective debit and credit values.- **Calculations**: When journalizing the collection at maturity, compute the interest based on the time and interest rate, and round it to the nearest dollar.This educational exercise involves understanding how to properly record lending transactions and the subsequent collection of principal and interest on a promissory note. This will help strengthen accounting skills in handling financial instruments.

The journal entries are prepared to keep the record of day to day transactions of the business.The assets and expenses are debited with increase in balance. The liabilities and revenue are credited with Increase in balance. JOURNALDate Particulars Debit Amt $Credit amt $June 1Note receivable 86,200Cash86,200(To record cash lent and note received) Aug 30Cash86,631Note receivables 86,200 Interest revenue 431(To record note collection) Calculation of maturity date:Issued date = June 1Time period = 90 daysMaturity date = 29 + 31 + 30 = 30 AugustInterest revenue = 86,200*2%*90/360 = $431The detailed solution has been provided under step 2 and 3.

Business

Accounting

12. Journalize for Taci Company the lending of the money on June 1. 13. Journalize the collection of the principal and interest at maturity. Specify the date. Round interest to the nearest dollar. 12. Journalize for Taci Company the lending of the money on June 1. (Record debits first, then, credits. Select the explanation on the last line of the journal entry table. For notes stated in days, use a 365-day year.) Accounts and Explanation Date Jun. 1 Debit Credit

12. Journalize for Taci Company the lending of the money on June 1. 13. Journalize the collection of the principal and interest at maturity. Specify the date. Round interest to the nearest dollar. 12. Journalize for Taci Company the lending of the money on June 1. (Record debits first, then, credits. Select the explanation on the last line of the journal entry table. For notes stated in days, use a 365-day year.) Accounts and Explanation Date Jun. 1 Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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