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On April 1,2019,Wolf Company Borrowed $5,000 on an 8% Note

question 22

Essay

On April 1,2019,Wolf Company borrowed $5,000 on an 8% note payable.The maturity date of the note (and payment of all interest)is July 1,2020.The accounting period ends December 31.Assume no adjusting entries are made during the year.
Prepare the journal entry for each of the following dates:
A.April 1,2019.
B.December 31,2019.
C.July 1,2020.


Definitions:

Contract Obligations

Duties imposed by a contract that parties must perform; failure to do so can result in legal action.

Partnership By Estoppel

A legal principle that occurs when a person who is not technically a partner in a business behaves like a partner or allows others to believe they are a partner, and as a result, may be held liable as a partner.

Justifiably Relies

A principle where a party reasonably depends on the statements or actions of another, typically in a legal or contractual context.

Remaining Partners

The partners who continue the business after one or more partners depart.

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