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3 September, 01:03

Your uncle repays a $100 loan from Tenth National Bank (TNB) by writing a $100 check from his TNB checking account. Assume these funds are the only loans and deposits available for your uncle and the bank.

Complete the following T-accounts for your uncle and TNB before your uncle repays the loan.

Your Uncle

Assets Liabilities

Tenth National Bank

Assets Liabilities

Complete the following T-accounts for your uncle and TNB after your uncle repays the loan.

Your Uncle

Assets Liabilities

Tenth National Bank

Assets Liabilities

True or False: Your uncle's wealth has changed.

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Answers (1)
  1. 3 September, 03:29
    0
    Answer:1. Uncle accounts before loan payment.

    Creditor TNB

    Dr. CR

    Balance b/f $100

    . Bank TNB

    Dr. CR

    Balance b/f $100

    2. TNB Accounts before loan payment

    Debtor Uncle

    Dr. CR

    Balance b/f $100

    Deposit account Uncle

    Dr. CR

    Balance b/f $100

    Uncle accounts after loan payment

    Creditor TNB

    Dr. CR

    Bank TNB $100. Balance blf $100

    Bank TNB

    Dr. CR

    Balance b/f $100. Creditor TNB$100

    TNB account after loan payment

    Debtor Uncle

    Dr. CR

    Balance b/f $100. Bank TNB $100

    Deposit Uncle

    Dr. CR

    Debtor Uncle $ 100 Balance b/f $100

    Explanation:

    False. Wealth is measured as the difference between Assets and liabilities which is the net asset, for Uncle prior to the loan repayment his wealth was zero and after the loan repayment it still remains zero.
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