Identify and analyze the effect of these transactions

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Reference no: EM13520887

McLaughlin Inc. operates with a June 30 year-end. During 2010, the following transactions occurred:
a. January 1: Signed a one-year, 10% loan for $35,000. Interest and principal are to be paid at maturity.
b. January 10: Signed a line of credit with Little Local Bank to establish a $560,000 line of credit. Interest of 9% will be charged on all borrowed funds.
c. February 1: Issued a $28,000 non-interest-bearing, six-month note to pay for a new machine. Interest on the note, at 12%, was deducted in advance.
d. March 1: Borrowed $210,000 on the line of credit.
e. June 1: Repaid $140,000 on the line of credit plus accrued interest.
f. June 30: Made all necessary adjusting entries.
g. August 1: Repaid the non-interest-bearing note.
h. September 1: Borrowed $280,000 on the line of credit.
i. November 1: Issued a three-month, 8%, $16,800 note in payment of an overdue open account. j. December 31: Repaid the one-year loan [from transaction (a)] plus accrued interest.

Required
1. Identify and analyze the effect of these transactions.
2. As of December 31, which notes are outstanding? How much interest is due on each?

Reference no: EM13520887

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