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Question - On January 1, Alan King decided to deposit $60,100 in a savings account that will provide funds four years later to send his son to college. The savings account will earn 7% annually. Any interest earned will be added to the fund at year-end (rather than withdrawn).
1. How much will be available in four years?
2. Prepare the journal entry that alan should make on January 1?
3. What is the total interest for the four years?
4. Prepare the journal entry that Alan should make on December 31 of the first year and December 31 of the second year.
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