On January 1, 2003, Pat Larsen decided to open the Donut Shop. Pat deposited $40,000 of her own money in a company bank account and obtained a $30,000 loan from a local bank. During its first year of operation, the shop had net income of $84,000, which included $150,000 of revenues and $66,000 of expenses. Pat withdrew a lump sum of $48,000 from the business that year to cover personal living expenses. 1. Prepare journal entries to record:

a. Pat’s original contribution to the firm.

b. The bank loan.

c. Pat’s withdrawal for her living expenses.

d. Any closing entries required at year-end. 2. Prepare a statement of owner's capital for 2003. 3. Interpretive Question: How would the accounting for the transactions in part (1) be different if Pat’s business were a corporation?