Question

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.

Answer 1

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

Step-by-step 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.