Magic Enterprises borrowed $18,000 from the local bank on Julyl 1, 2010, when the company was started. The note had an 8 percent annual interest rate...

Magic Enterprises borrowed $18,000 from the local bank on Julyl 1, 2010, when the company was started. The note had an 8 percent annual interest rate and a one-year term to maturity. Magic Enterprises recognized $42,500 of revenue on account in 2010 and $45,000 of revenue on account in 2011. Cash collections from accounts receivable were $36,000 in 2010 and $35,000 in 2011. Magic Enterprises paid $24,000 of salaries expense in 2010 and $28,000 of salaries expense in 2011. Repaid the loan and interest at the maturity date