Dec. 1 Borrowed $24,000 from the Icecap Bank for three years, at 3% interest. Interest is due on the first day of every month, starting on January 1 next year.

Dec. 5 Hired seven elves to package toys (they start work tomorrow) and nine reindeer to deliver them on Christmas Eve.

Dec. 24 Since they were hired, the seven elves have worked for 14 days each, 7 hours per day, and today Santa pays them $25 per hour.

Dec. 24 As the North Pole is in Canada, Santa has deducted the following in total from the elves' pay: EIT $2750; CPP $625; and EI $400. The appropriate employer portion is also accrued

Dec. 26 The deliveries were successful and the reindeer are paid with apples, oats, honey, and whatever milk and cookies Santa was able to take away.

Dec. 28 Santa's accountants, Scrooge, Grinch & Partners, tell Santa that he owes $9500 for last year's income taxes. He has not paid this amount yet. It will be paid in April.

Dec. 31 The first interest amount on the loan, due tomorrow, is accrued.

Jan. 1 The bank deducts the interest from Santa's account.

Jan. 15 Santa pays Revenue Canada the amount owed with respect to the elves' payroll. Use an accounting chart to analyze the above transactions, and then answer the following questions.

1. How much interest does Santa pay on January 1? (2 marks)

2. How much, in total, was the elves' gross pay on December 24? (2 marks)

3. How much did Santa pay the elves on December 24? (2 marks)

4. How much does Santa pay Revenue Canada on January 15, with respect to the elves' December payroll? (2 marks)

5. How does Santa record the December 1 transaction? (1 mark) options:

a)

no entry needed until the loan is paid

b)

increase both Cash and Accounts Payable

c)

increase both Cash and Bank Loan Payable

d)

increase both Cash and Retained Earnings

e)

increase both Cash and Owner's Equity