On august 1, year 1 Gomez Company borrowed $48,000 cash. The one-year note carried a 5% rate of interest. Which of the following shows how the accrual of interest expense in Year 2 will effect Gomez?s financial statements?

Assets NA Assets Assets Assets NA Balance Sheet Liab. 1,400 . Balance Sheet Liab 1,400 Balance Sheet Liab. 1,000 Balance Sheet Liab. 1,000 W Equity (1,400) Equity (1,400) Equity (1,000) Equity (1,000) Rev. Rev. Rev. NA Rev. NA Income Statement Exp. - 1,400 . Income Statement Exp. 1,400 Net Inc. (1,400) Income Statement . Net Inc. (1,400) Exp. N Net Inc. 1,000 (1,000) Income Statement Exp. 1,000 . Net Inc. (1,000) Statement of Cash Flows (1,400) OA Statement of Cash Flows Statement of Cash Flows (1,000) OA Statement of Cash Flows NA