REQUIRED (a) Prepare journal entries to record the following transactions: (i) the borrowing on 1 July 2020 and (ii) the interest expense for the year ended on 31 December 2020. Narrations are not required. (b) Prepare the expense section of the statement of financial performance for the year ended 31 December 2020. (c) Prepare the liabilities section of the statement of financial position for the year ended 31 December 2020. overdraft.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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OSS 4E MYE 2021
On 1 July 2020, Cooky Land obtained a bank loan of $500 000 from BT Bank.
The loan is to be paid equally over 5 years.
The first payment, together with the interest, falls on 30 June 2021.
The interest incurred for the year ended 31 December 2020 was $5 000.
REQUIRED
(a) Prepare journal entries to record the following transactions:
(i) the borrowing on 1 July 2020 and
(ii) the interest expense for the year ended on 31 December 2020.
Narrations are not required.
(b) Prepare the expense section of the statement of financial performance for the
year ended 31 December 2020.
(c) Prepare the liabilities section of the statement of financial position for the year
ended 31 December 2020.
(d) Explain the difference between bank loan and bank overdraft.
Transcribed Image Text:OSS 4E MYE 2021 On 1 July 2020, Cooky Land obtained a bank loan of $500 000 from BT Bank. The loan is to be paid equally over 5 years. The first payment, together with the interest, falls on 30 June 2021. The interest incurred for the year ended 31 December 2020 was $5 000. REQUIRED (a) Prepare journal entries to record the following transactions: (i) the borrowing on 1 July 2020 and (ii) the interest expense for the year ended on 31 December 2020. Narrations are not required. (b) Prepare the expense section of the statement of financial performance for the year ended 31 December 2020. (c) Prepare the liabilities section of the statement of financial position for the year ended 31 December 2020. (d) Explain the difference between bank loan and bank overdraft.
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