The Following Events Affected the New Athens University Loan Fund

question 19

Essay

The following events affected the New Athens University Loan Fund:
1. $300,000 is received from a donor to establish a student loan fund. Loans will carry a 6% annual interest rate.
2. The Loan Fund loaned the $300,000 to students. Five percent of the loans are estimated to be uncollectible.
3. Loans of $50,000 were repaid with $3,000 of interest.
4. A $1,000 student loan was written off as uncollectible.
Required:
Prepare the journal entries necessary to record these transactions.

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Definitions:

Direct Commands

Instructions given clearly and unequivocally, expecting immediate compliance.

Compliance

When people yield to social pressure in their public behavior, even though their private beliefs have not changed.

Obedience

The act of following the directives of authority figures.

Emergency

A sudden, urgent, usually unexpected occurrence requiring immediate action or attention.