Your uncle repays a $300 loan from Tenth National Bank (TNB) by writing a $300 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 AssetsLiabilities $ $ Tenth National Bank AssetsLiabilities $ $ Complete the following T-accounts for your uncle and TNB after your uncle repays the loan. Your Uncle AssetsLiabilities $ $ Tenth National Bank AssetsLiabilities $ $ True or False: Your uncle's wealth has changed. True False

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amcool amcool · Answer 1 · 2021-04-15T12:51:47+02:00

Answer:

a. We have:

Four your Uncle: Debit the T-accounts under Assets (Checking) for $100; Credit the T-accounts under Liabilities (Loans) with $100.

Four Tenth National Bank: Debit the T-accounts under Assets (Loan) with $100; Credit the T-accounts under Liabilities (Deposits) for $100.

b. We have:

Four your Uncle: Debit the T-accounts under Assets (Checking) for $0; Credit the T-accounts under Liabilities (Loans) with $0.

Four Tenth National Bank: Debit the T-accounts under Assets (Loan) with $100; Credit the T-accounts under Liabilities (Deposits) for $0.

c. False

Explanation:

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

Note: See part a of the attached excel for the T-accounts for your uncle and TNB before your uncle repays the loan

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

Note: See part b of the attached excel for the T-accounts for your uncle and TNB after your uncle repays the loan

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

False, his wealth has not changed. The reason is that his assets are now zero and his liabilities or loans are also now zero.