Rainey Enterprises loaned $50,000 to Small Company on June 1, Year 1, for one year at 8 percent interest. Required Show the effects of the following transactions in a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. (1) The loan to Small Company (2) The adjusting entry at December 31, Year 1. (3) The adjusting entry and collection of the note on June 1, Year 2. Aggota RAINEY ENTERPRISES Horizontal Statements Model Balance Sheet Stockholders' Income Statement Statement of G
Rainey Enterprises loaned $50,000 to Small Company on June 1, Year 1, for one year at 8 percent interest. Required Show the effects of the following transactions in a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. (1) The loan to Small Company (2) The adjusting entry at December 31, Year 1. (3) The adjusting entry and collection of the note on June 1, Year 2. Aggota RAINEY ENTERPRISES Horizontal Statements Model Balance Sheet Stockholders' Income Statement Statement of G
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Rainey Enterprises loaned $50,000 to Small Company on June 1, Year 1, for one year at 8 percent interest.
Required
Show the effects of the following transactions in a horizontal statements model. In the Statement of Cash Flows column, indicate
whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA).
Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.
(1) The loan to Small Company
(2) The adjusting entry at December 31, Year 1.
(3) The adjusting entry and collection of the note on June 1, Year 2.
Date
1. 6/1/Y1
2. 12/31/Y1
3. 6/1/Y2 (Adjusting entry)
6/1/Y2 (Collection of the note)
Cash
(50,000) +
+
+
Assets
Notes
Receivable
+
50,000+
+
+
+
RAINEY ENTERPRISES
Horizontal Statements Model
Balance Sheet
Interest
Receivable
Liabilities
+
+
+
+
Stockholders'
Equity
Retained
Earnings
Revenue
Income Statement
-
Expenses
= Net Income
=
Statement of Cash
Flows
(50,000) A
OA
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