Question

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Rainey Enterprises loaned $25,000 to Small Co. on June 1. 2018, for one year at 6 percent interest Required Show the effects of the following transactions in a horizontal statements. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). For any element not affected by the event, leave the cell blank (Not every cell will require entry. Do not round intermediate calculations. Enter any decreases to account balances and cas outflows with a minus sign.) (1) The loan to Small Co. (2) The adjusting entry at December 31, 2018 (3) The adjusting entry and collection of the note on June 1, 2019. RAINEY ENTERPRISES Horizontal Statements Model = Equity Income Statement Interest Retained Revenue - Expense - Net Income Receivable Earnings Date Assets Notes Decevable Statement of Cash Flow Cash 1 6/1/18 2 12/31/18 6/1/19 6/1/19 6/1/19

Answer 1

Dear Student,

As per the HOMEWORKLIB POLICY, only the first question should be ansered. Kindly take note of it. Every ne question should be posted Separately.

Rainey Enterprises Horizontal Statements Model

Assets

Equity

Income statement

Statement of cash flows

Date

Cash

+

Notes receivable

+

Interest receivable

=

Retained earnings

Revenue

-

Expenses

=

Net icome

1

6/12/18

(25000)

25000

NA

NA

NA

NA

NA

(20000)

IA

2

12/31/18

NA

NA

875

875

875

NA

NA

NA

NA

3

6/1/19

NA

NA

625

625

625

NA

NA

NA

NA

6/1/19

26500

(25000)

(1500)

25000

IA

6/1/19

1500

OA

No.	Date	Account titles	Debit	Credit
1	6/12/18	Notes receivable	25000
		Cash		25000
2	12/31/18	Interest receivable	875
		Interest revenue		875
3	6/1/19	Interest receivable	625
		Interest revenue		625
4	6/1/19	Cash	26500
		Interest receivable		1500
		Notes receivable		25000

Interest expense (Dec. 31) = 25000*6%7/12 = 875

Interest expense (june 1) =25000*6%*5/12 =625