A) Does Christina Fashions comply with the banks current ratio requirement prior to recording the accrued interest and reclassification of the current portion of the long-term loan? (Round answer to 1 decimal place, e.g. 1.2.)

B) Prepare journal entries to record the interest payable on December 31, 2020.

C) Prepare the journal entries to reclassify the portion of the long-term loan as current.

D) Does Christina Fashions breach the banks current ratio requirement after preparing the journal entries above? (Round answer to 2 decimal places, e.g. 1.25.)

On May 1, 2020, Christina Fashions borrowed $103,000 at a bank by signing a four-year, 6% loan. The terms of the loan require equal principal payments of $25,750 and accrued interest at 6% due annually on April 30. The loan agreement requires the company to maintain a minimum current ratio of 2.0. The December 31, 2020, year-end statement of financial position, immediately prior to the reclassification of long-term debt, follows: Current assets Non-current assets $132,000 Current liabilities $55,000 163,000 Loan payable 103,000 Common shares 67,000 Retained earnings 70,000 Total liabilities and $295,000 shareholders' equity $295,000 Total assets