The Yankee Traveler is a magazine devoted to fall foliage tours in New England. Its owner, Kellie Key, is better attuned to cultural affairs than to the business aspects of running a magazine. Readership is at an all-time high, but the financial position of the business has suffered. For each of the following items indicate the accounting action needed at December 31, the end of the accounting year. Also identify the underlying accounting concept most directly applicable to your answer.

a. On March 31, The Yankee Traveler had to borrow \(\$ 50,000\) to pay bills. The interest rate of this one-year loan is 7 percent, payable March 31.

b. Key intermingles her personal assets with those of the business. In applying for the \(\$ 50,000\) loan, she wanted to include on the company books her Cadillac automobile, which was worth \(\$ 24,000\). Her reasoning was that the business was a proprietorship and that her personal assets are available to the magazine if needed.

c. Its financial position is so dismal that The Yankee Traveler is in danger of failure. Assets measured at historical cost total \(\$ 1.3\) million, but their current market value is only \(\$ 400,000\), which barely exceeds liabilities of \(\$ 350,000\). For now it appears that the magazine will remain in business.