38. West County Bank agrees to lend Drake Builders Company $400,000 on January 1. Drake Builders Company signs a $400,000, 6%, 6-month note. The entry made by Drake Builders Company on January 1 to record the proceeds and issuance of the note is

a. Interest Expense...................................................................................... 6,000

Cash. ................................................................................................. 194,000

Notes Payable..................................................................................... 400,000

b. Cash ................................................................................................. 400,000

Notes Payable..................................................................................... 400,000

c. Cash ................................................................................................. 400,000

Interest Expense.................................................................................... 12,000

Notes Payable..................................................................................... 412,000

d. Cash ................................................................................................. 400,000

Interest Expense.................................................................................... 12,000

Notes Payable..................................................................................... 400,000

Interest Payable.................................................................................. 12,000

Right answer: ___

27. Straight-line depreciation results in A. Depreciation expense being a constant amount each year. B. Accumulated depreciation increasing by an equal amount each year. C. Book value decreasing by the same equal amount each year. D. All of the choices are correct.

Right answer: ___