Practice Exercise 1 Kelly Jones and Tami Crawford borrowed $46,500 on a 7-month, 4% note from Gem State Bank to open their business, JC's Coffee House. The money was borrowed on June 1, 2017, and the note matures January 1, 2018. Prepare a tabular summary to record the receipt of the funds from the loan. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets = Liabilities + Stockholders' Equity Retained Earnings Revenue - Expense - Cash = Notes Pay. + Interest Pay. + Common Stock + Dividend June 1, 2017 $ Prepare a tabular summary to accrue the interest on June 30. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets Liabilities Stockholders' Equity Retained Earnings Cash = Notes Pay. + Interest Pay. + Common Stock + Revenue Expense - Dividend June 1, 2017 $46,500 $46,500 June 30, 2017 Interest expense $ Assuming adjustments are made at the end of each month, determine the balance in the Interest Payable account at December 31, 2017. Balance in interest payable account $ Prepare a tabular summary to record the repayment of the loan on January 1, 2018. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets = Liabilities + Stockholders' Equity Retained Earnings Cash = Notes Pay. + Interest Pay. + Common Stock + Revenue - Expense - Dividend $46,500 $46,500 $155 -$155 June 1, 2017 June 30, 2017 Jan. 1, 2018 Interest expense Click if you would like to Show Work for this question: Open Show Work