BUSINESS ENTITIES AND OWNERS’ ACTIVITIES. Libby Vote owns and manages The Tennis Ball, a store selling tennis equipment and clothing. During 19x1 Libby engaged in the following activities:

a) Libby gave a tennis racket to Mary Jones as a birthday present. Libby had the business record the $80 cost of the racket as an addition to her salary expense.

b) While using The Tennis Ball’s truck to make a delivery to a nearby tennis club, Libby paid $20 for gasoline for the truck from her personal funds. Libby had the store pay her the $20 and record that amount as an expense of the store.

ce) Libby loaned $10,000 to The Tennis Ball last year. Libby had the store pay her

$1,000 interest. The store recorded the payment of $1,000 as interest expense.

REQUIRED:

Indicate whether or not each of these activities is properly recorded as an expense of the business. Explain your choices.