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McLaughlin Inc operates with a June 30 year-end During 2008 the following transactions occurred January 1 Signed a one-year 10% loan for $35000 Interest and principal are to be paid at

McLaughlin Inc. operates with a June 30 year-end. During 2008, the following transactions occurred:

a. January 1: Signed a one-year, 10% loan for $35,000. Interest and principal are to be paid at

maturity.

b. January 10: Signed a line of credit with the Little Local Bank to establish a $560,000 line of

credit. Interest of 9% will be charged on all borrowed funds.

c. February 1: Issued a $28,000 non-interest-bearing, six-month note to pay for a new machine.

Interest on the note, at 12%, was deducted in advance.

d. March 1: Borrowed $210,000 on the line of credit.

e. June 1: Repaid $140,000 on the line of credit, plus accrued interest.

f. June 30: Made all necessary adjusting entries.

g. August 1: Repaid the non-interest-bearing note.

h. September 1: Borrowed $280,000 on the line of credit.

i. November 1: Issued a three-month, 8%, $16,800 note in payment of an overdue open account.

j. December 31: Repaid the one-year loan [from (a)] plus accrued interest.

 

May 03 2020 Read more Less More

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