In this question i do not understand why the repayment to the loan: 3M not to be subtracted from Reserves, as the question said that the T Co shall pay 3M each year which source from the Cash flow of the business, pls. advise
Much thanks
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Proteus-Dec 11
10y ago#1Repaying a loan does not affect reserves - the double entry to repay a loan is Cr Cash Dr Loan.
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