Exercise 4

On 1/1/2018 a governmental institution established a permanent loan of QR 50,000. The amount was disbursed to the Purchasing Manager (Ahmad Al Hajri). It was decided that this amount will be used to cover the simple daily expenses which do not exceed QR 2,000 per day. On April 5, Mr. Ahmed Al-Hajri applied for a loan replacement. And offers invoices of 45,000 riyals. On May 3, it was decided to increase the permanent loan to QR 80,000. On July 13, Mr. Ahmed submitted invoices forQR 28,000 and requested the replacement . On August 30, it was decided to reduce the loan to 40,000 riyals and Mr. Ahmed deposited the amount in the account of the governmental institution. On 31 December, Ahmed deposited the remaining balance of QR 7,000 to the Bank after submitting invoices for the last two months of November and December 2018. Required: Prepare the journal entries to record the previous transactions for operations in 2018.