Bill Darby started Darby Company on January 1, Year 1. The company experlenced the following events during its first year of operation: 1. Earned $1,100 of cash revenue. 2. Borrowed $2,200 cash from the bank: 3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, Issued on 5eptember 1, Year 1 , had a one-year term and an 5 percent annual interest rate. Requilred 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 Yeat 1? d. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash fiows. Indicate whether the event increases (1) or decreases (D) each element of the financial statearents, In the Statement of Cash Fiows column, classify the cash fiows as operating activities (OA). Investing activities (A) or financing activilies (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. What is the amount of interett poyable at December 31, Year 13 Fiter De niet round intermediate taloulations. Hound your anewer to the nearest deliat omount. What is the amount of interest expense in Year 1 ? Hows column, classify the cash nows as operating activities (UA), investing activities (iA) or financing activities (1-A). Columns tor events that have no effect an 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. What is the amount of interest payable at December 31 , Year 17 Note: Do not round intermediate calculatiens. Round your answer to the nesrest dolise amount. What is the aenount of interest expense in year 1? Note: Do not round intermediate calculations. Round your answer to the nearest dollar amount What is the amount of interest paid in Year 17 Use a horizontal statements model te show how each event alfects the balance sheet, Income statement, and statement of eash flows. Indicate whether the event incres the financial statementa, In the Statement of Cash Flows columr, dassify the cash fows as operating activities (DA), levesting activities (iA) or firancing activties (FA). any of the elements should be left biank. The first transaction has been recorded as an example. 4 Note Not all cetis will require an input
