On May 1, 2020, Christina Fashions borrowed $100,000 at a bank by signing a four-year, 6% loan. The terms of the loan require equal principal payments of $25,000 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 $122,200 Current liabilities $47,000 Non-current assets 171,800 Loan payable 100,000 Common shares 73,000 Retained earnings 74,000 Total liabilities and shareholders' equity Total assets $294,000 $294,000 Your answer is correct. Does Christina Fashions comply with the bank's 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.) Current ratio 2.6 Christina Fashions meets the bank's minimum current ratio. e Textbook and Media List of Accounts Your answer is correct. Prepare journal entries to record the interest payable on December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Interest Expense 4000 Interest Payable 4000 eTextbook and Media List of Accounts Your answer is correct. Prepare the journal entries to reclassify the portion of the long-term loan as current. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Long-Term Loan Payable 25000 Current Portion of Long-Term Debt 25000 Your answer is partially correct. Does Christina Fashions breach the bank's current ratio requirement after preparing the journal entries above? (Round answer to 2 decimal places, e.g. 1.25.) Current ratio 6.25 Christina Fashions does not meet the bank's minimum current ratio