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borrowings

borrowings

FINANCIAL ACCOUNTING
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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Mohammed LLC is a growing consulting firm. The following transactions take place during the current year. A. On June 10, Mohammed borrows $310,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in four months from June 10, and annual interest rate of 7%. B. On July 9, Mohammed borrows an additional $120,000 with payment due in four months from July 9, and an annual interest rate of 14%. C. Mohammed pays their accounts in full on October 10 for the June 10 loan, and on November 9 for the July 9 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Mohammed. If an amount box does not require an entry, leave it blank. Round intermediate calculation and final answers to the nearest whole dollar. June 10 July 9 Oct. 10 Nov. 9
Transcribed Image Text:Mohammed LLC is a growing consulting firm. The following transactions take place during the current year. A. On June 10, Mohammed borrows $310,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in four months from June 10, and annual interest rate of 7%. B. On July 9, Mohammed borrows an additional $120,000 with payment due in four months from July 9, and an annual interest rate of 14%. C. Mohammed pays their accounts in full on October 10 for the June 10 loan, and on November 9 for the July 9 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Mohammed. If an amount box does not require an entry, leave it blank. Round intermediate calculation and final answers to the nearest whole dollar. June 10 July 9 Oct. 10 Nov. 9
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