Bill Darby started Dorty Company on January 1, Year 1. The company experienced the following events during its first year of operation: ped 1. Earned $1,100 of cash revenue. 2. Borrowed $2,600 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 6 percent annual Interest rate ind 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 stalements 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 (IA) 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. ences Complete this question by entering your answers in the tabs below. Req AtoC RegD Use a horizontal statements model to show how each event affects the balance sheet, Income statement, and statement of cash flows. Indicate whether t the financial statements. In the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA) or financing any of the elements should be left blank. The first transaction has been recorded as an example. (Note: Not all cells will require an input.) DARBY COMPANY 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 the financial statements. In the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA) or financing activities any of the elements should be left blank. The first transaction has been recorded as an example. (Note: Not all cells will require an input.) DARBY COMPANY Horizontal Statements Model for Year 1 Income Statement Event Assets Revenue Balance Sheet Liabilities Notes Interest Payablo Payable Expense Net Income Statement of Cash Flows Stockholders' Equity Common Retained Stock Earnings No Cash 1 ! 1 2 ++ ++ 3