Babb Enterprises loaned \($25,000\) to Sneathen Co. on September 1, 2008, for one year at 6 percent interest.

Required:

Show the effects of the following transactions in a horizontal statements model like the one shown below.
(1) The loan to Sneathen Co.
(2) The adjusting entry at December 31, 2008.
(3) The adjusting entry and collection of the note on September 1, 2009.

Transcribed Image Text:

= Liab. + Equity Rev. Ret. Earn. Assets Date Cash + Notes Rec. + Int. Rec. == - Exp. == Net Inc. Cash Flows