Trace the following transactions with the use of T-accounts:
a. $100,000 is deposited in Hemlock Community Bank, where the reserve requirement is 3 percent.
b. The bank lends a small business all its excess reserves through a loan-created demand deposit.
c. Excess reserves are paid out to cover the loan.

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The Answer of Trace the following transactions with the use of T-accounts:
a. $100,000 is deposited in Hemlock Community Bank, where the reserve requirement is 3 percent.
b. The bank lends a small business all its excess reserves through a loan-created demand deposit.
c. Excess reserves are paid out to cover the loan.

Trace the Following Transactions with the Use of T-Accounts