1)

efferson Company made a loan of $6,000 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate of interest. The amount of cash flow from operating activities that Jefferson would report in Year 1 and Year 2, respectively would be

$360, and $0.

$0, and $360.

$90, and $270.

$270, and $90.

2)

On September 1, Year 1 Western Company loaned $36,000 cash to Eastern Company. The one-year note carried a 5% rate of interest. The amount of interest revenue on the income statement and the amount of cash flow from operating activities shown on Westerns December 31, Year 1 financial statements would be

$600 interest revenue and $1,800 cash flow from operating activities.

$1,200 interest revenue and $1,800 cash flow from operating activities.

$600 interest revenue and zero cash flow from operating activities.

$1,200 interest revenue and zero cash flow from operating activities.