Show transaction in a t-account

Reference no: EM1393256

Suppose Fred deposits $8,000 in cash into his checking account at the Bank of Bonzo. The Bank of Bonzo has no excess reserves and is subject to a 5 percent required reserve ratio.

a. Show this transaction in a T-account for the Bank of Bonzo.

b. Assume the Bank of Bonzo makes the maximum loan possible from Fred's deposit to Clarice and show this transaction in a new T-account.

Reference no: EM1393256

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