Please provide journal entry for this transaction
Technotronics Electronics Limited Technotronics Electronics Limited (TEL) is a small, start-up technology company in Ottawa that manufac- tures portable keyboards for mobile devices and tablets. TEL has been working to perfect a technology that is used in a laser-projection virtual keyboard. TEL has been investing heavily in research and development, and is constantly having working capital issues. In order to ease the pressure, TEL has taken out a $500,000 working capital loan. The loan is required to be paid back within two years, and carries an interest rate of 1% per month on any outstanding balance. The loan includes a covenant that requires the current ratio to be maintained at least 1.5:1. You are the controller of TEL, and you are preparing for the December 31, 2017, year-end audit. You know that the shareholders and bank will be paying close attention to the financial statements this year due to the covenant. Accordingly, the CFO would you like to prepare a memo that analyzes the following key accounting issues: 4. TEL holds a $500,000 loan with the Royal Legion Bank that is due on January 31, 2018. Management intends to refinance the loan into a five-year blended payment loan. As of year end, the company had received the financing contract, but it had not yet signed the document. The board of directors is expected to formally approve the refinancing at the upcoming meeting on January 10, 2018. The loan is classified as non-current. Technotronics Electronics Limited Technotronics Electronics Limited (TEL) is a small, start-up technology company in Ottawa that manufac- tures portable keyboards for mobile devices and tablets. TEL has been working to perfect a technology that is used in a laser-projection virtual keyboard. TEL has been investing heavily in research and development, and is constantly having working capital issues. In order to ease the pressure, TEL has taken out a $500,000 working capital loan. The loan is required to be paid back within two years, and carries an interest rate of 1% per month on any outstanding balance. The loan includes a covenant that requires the current ratio to be maintained at least 1.5:1. You are the controller of TEL, and you are preparing for the December 31, 2017, year-end audit. You know that the shareholders and bank will be paying close attention to the financial statements this year due to the covenant. Accordingly, the CFO would you like to prepare a memo that analyzes the following key accounting issues: 4. TEL holds a $500,000 loan with the Royal Legion Bank that is due on January 31, 2018. Management intends to refinance the loan into a five-year blended payment loan. As of year end, the company had received the financing contract, but it had not yet signed the document. The board of directors is expected to formally approve the refinancing at the upcoming meeting on January 10, 2018. The loan is classified as non-current
