Record journal entries to recognize the initial borrowings

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Question - Mohammed LLC is a growing consulting firm. The following transactions take place during the current year.

1. On June 10, Mohammed borrows $270,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in four months from June 10, and annual interest rate of 5%.

2. On July 9, Mohammed borrows an additional $100,000 with payment due in four months from July 9, and an annual interest rate of 12%.

3. Mohammed pays their accounts in full on October 10 for the June 10 loan, and on November 9 for the July 9 loan.

Required - Record the journal entries to recognize the initial borrowings, and the two payments for Mohammed.

Reference no: EM132629742

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