Sharon’s Affairs and Parties (SAAP) engaged in the following transactions in 1999:
1. SAAP borrowed $150,000 at 10 percent per year to begin operations.
2. SAAP accrued the first month’s interest on the loan.
3. SAAP accrued the second month’s interest.
4. SAAP paid the interest due at the end of the second month.
5. Sharon loaned SAAP $10,000 at 24 percent interest per year.
6. SAAP accrued interest for the next month on both loans.
7. SAAP paid accrued interest at the end of the third month.
8. SAAP repaid Sharon’s loan, along with a loan “cancellation” fee of $2,500.
9. SAAP accrued interest for the next month.
10. SAAP repaid the original loan, along with nine months accrued interest at the end of 1999.
Required
a. Prepare the journal entries to record these transactions.
b. Post all journal entries to T-accounts.
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