e. Palmer took out a 120-day, 9%, $170,000 note on November 1, 2017, with interest and principal to be paid at maturity. Assume a 360-day year.

Activity	FinancingInvestingOperatingInvesting
Accounts	Interest Payable Increase, Interest Expense IncreaseInterest Payable Increase, Interest Expense DecreaseInterest Payable Decrease, Interest Expense IncreaseInterest Payable Decrease, Interest Expense DecreaseInterest Payable Increase, Interest Expense Increase
Statement(s)	Balance Sheet onlyBalance Sheet and Income StatementIncome Statement onlyBalance Sheet and Income Statement

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Balance Sheet

Income Statement

Stockholders'

Net

Assets

=

Liabilities

+

Equity

Revenues

Expenses

=

Income

CashInterest ExpenseInterest PayableNotes PayableNotes ReceivableNo EntryNo Entry

fill in the blank f05a7d04af8e077_2

CashInterest ExpenseInterest PayableInterest RevenueNotes PayableNo EntryInterest Payable

fill in the blank f05a7d04af8e077_4

fill in the blank f05a7d04af8e077_5

CashInterest ExpenseInterest PayableInterest RevenueNotes PayableNo EntryNo Entry

fill in the blank f05a7d04af8e077_7

CashInterest ExpenseInterest PayableNotes PayableNotes ReceivableNo EntryInterest Expense

fill in the blank f05a7d04af8e077_9

fill in the blank f05a7d04af8e077_10

2. Assume that Palmers accountant forgets to record the adjustments on December 31, 2017. Will net income for the year be understated or overstated?

By what amount? (Ignore the effect of income taxes.) $fill in the blank 3bc366ff907d007_2