Glencoe Inc. operates with a June 30 year-end. During 2017, the following transactions occurred:

1. January 1: Signed a one-year, 10% loan for $25,000. Interest and principal are to be paid at maturity.
2. January 10: Signed a line of credit with Little Local Bank to establish a $400,000 line of credit. Interest of 9% will be charged on all borrowed funds.
3. February 1: Issued a $20,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance.
4. March 1: Borrowed $150,000 on the line of credit.
5. June 1: Repaid $100,000 on the line of credit plus accrued interest.
6. June 30: Made all necessary adjusting entries.
7. August 1: Repaid the non-interest-bearing note.
8. September 1: Borrowed $200,000 on the line of credit.
9. November 1: Issued a three-month, 8%, $12,000 note in payment of an overdue open account.
10. December 31: Repaid the one-year loan [from transaction (a)] plus accrued interest.

1. Identify and analyze the effect of these transactions. Do not round intermediate calculations. If required, round your final answers to the nearest dollar. a. January 1: Signed a one-year, 10% loan for $25,000. Interest and principal are to be paid at maturity. Activity Financing Accounts Cash Increase, Notes Payable Increase Statement(s) Balance Sheet only Feedback How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses Income Cash 25,000 Notes Payable 25,000 No Entry No Entry b. January 10: Signed a line of credit with Little Local Bank to establish a $400,000 line of credit. Interest of 9% will be charged on all borrowed funds. How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets = Liabilities + Equity Revenues Expenses Income No Entry No Entry No Entry No Entry Feedback c. February 1: Issued a $20,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance. Activity Accounts Equipment Increase, Discount on Notes Payable Increase, Notes Payable Increase Statement(s) Balance Sheet only Feedback a How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. account is increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders' Net Assets Liabilities + Equity Revenues Expenses = Income Equipment 18,800 Notes Payable 20,000 No Entry No Entry No Entry Discount on Notes Payable -1,200 How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Net Stockholders' Equity Assets = Liabilities + Revenues Expenses Income Cash 150,000 Notes Payable 150,000 No Entry No Entry Feedback e. June 1: Repaid $100,000 on the line of credit plus accrued interest. Activity Financing Accounts Cash Decrease, Notes Payable Decrease, Interest Expense Increase Statement(s) Balance Sheet only Feedback How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets = Liabilities + Equity Revenues Expenses Income Cash Notes Payable X No Entry Interest Expense 2,250 Feedback If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets = Liabilities Equity Revenues Expenses Income No Entry Interest Payable No Entry Interest Expense Feedback The adjustment to amortize the discount on the note: Activity Operating Accounts Interest Expense Increase, Discount on Notes Payable Increase X X Statement(s) Balance Sheet and Income Statement Feedback How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with account is increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders' Net Assets Liabilities Equity Revenues Expenses Income No Entry No Entry Interest Expense = + Feedback g. August 1: Repaid the non-interest-bearing note. Activity Financing Accounts Cash Decrease, Discount on Notes Payable Decrease, Notes Payable Decrease, Interest Expense Increase Statement(s) X