Essay
On June 1, Babar Corporation borrows $40,000 from the bank by signing a 2-month, 4.5%, bank loan. Interest is due at the beginning of each month, commencing July 1.InstructionsPrepare the entries listed associated with the bank loan on the books of Babar Corporation.
a. Prepare the entry on June 1 when the loan was received.
b. Prepare any adjusting entries necessary on June 30 in order to prepare the monthly financial statements. Assume no other interest accrual entries have been made.
c. Prepare the entry to record the payment of the interest on July 1.
d. Prepare the entry to record repayment of the loan at maturity on August 1.
Correct Answer:
Verified
Correct Answer:
Verified
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