On January 2, the company negotiated a $20,000 operating line with the bank. Interest will...
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On January 2, the company negotiated a $20,000 operating line with the bank. Interest will be charged at 4% per annum and the loan covenants limit the amount of the operating line to 60% of good receivables (accounts less than 60 days old). No money is advanced at this time.
28/01 - the company received $10,000 advance
15/02 - the company received $6,000 advance
01/03 - the company received $4,000 advance
On March 31, the company prepares adjusting entries for the first quarter of the year. Prepare adjusting entries to accrue operating loan interest.
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