Elbow Construction Ltd. borrowed $340,000 from TD Bank on October 1, 2017, for a nine-month period; 5% interest is payable at maturity. Both companies have a December 31 year end and make adjusting entries annually.

PART A

For Elbow Construction, record(1)the receipt of the bank loan on October 1, 2017;(2)the accrual of interest on December 31, 2017; and(3)the payment of the loan on July 1, 2018.(Remember to indent credit accounts)

PART B

For the TD Bank, record(1)the issue of the bank loan on October 1, 2017;(2)the accrual of interest on December 31, 2017; and(3)the collection of the loan on July 1, 2018.Hint:The TD Bank uses a Notes Receivable account to record its loans.