Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $1,200 of cash revenue. 2. Borrowed $2,300 cash from the bank. 3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, Year 1. had a one-year term and an 5 percent annual interest rate. Required a. What is the amount of interest payable at December 31, Year 1? b. What is the amount of interest expense in Year 1? c. What is the amount of interest paid in Year 1? d. Use a horizontal statements model to show how each event affects the balance sheet. Income statement, and statement of cash flows. Indicate whether the event increases (1) or decreases (D) each element of the financial statements. In the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (A) or financing activities (FA). Columns for events that have no effect on any of the elements should be left blank. The first transaction has been recorded as an example. Complete this question by entering your answers in the tabs below. Req A to C Reg D What is the amount of interest payable at December 31, Year 1? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) What is the amount of interest expense in Year 1? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) What is the amount of interest paid in Year 17 Show less hie a. b. c. Interest payable Interest expense Amount of cash paid . What is the amount of interest expense in Year 1? What is the amount of interest paid in Year 1? . Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash ows. Indicate whether the event increases (1) or decreases (D) each element of the financial statements. In the Statement of Cash lows column, classify the cash flows as operating activities (OA), investing activities (IA) or financing activities (FA). Columns for events at have no effect on any of the elements should be left blank. The first transaction has been recorded as an example. Complete this question by entering your answers in the tabs below. Reg A to C Reg D Use a horizontal statements model to show how each event affects the balance sheet, Income statement, and statement of cash flows. Indicate whether the event increases decreases (D) each element of the financial statements. In the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA) financing activities (FA). Columns for events that have no effect on any of the elements should be left blank. The first transaction has been recorded as an example. (Note: cells will require an input.) Show DARBY COMPANY Statements Modal for Year 1 Balance Sheet Income Statement Event Assets = Liabilities Stockholders' Equity Revenue - Expense - Net Income Statement of Cash Flows Cash - Notes Interest Pavable + Payable * Common Stock Retlined Earnings
