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Hines Enterprises loaned $4,000 to Baldwin Company on October 1,2010,for one year at 8% interest.
Required:
Show the effects on the financial statements model (below)of
a)the loan to Baldwin
b)the adjusting entry at December 31,2010
c)accrual of interest and collection of the note and related interest on October 1,2011
Indicate dollar amounts of increases and decreases.For cash flows,indicate whether the item is an operating activity (OA),investing activity (IA),or financing activity (FA).If an element is not affected by an event,indicate with NA.
Accounting System
A system used by businesses for tracking their financial transactions, consisting of various processes, records, and reports.
Special Journals
Journals that record similar types of transactions, such as all credit sales.
Sales Returns
Goods returned by customers after purchase, reducing the total sales revenue.
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