Exercise $9-2$A $($Algo$)$ Effects of recognizing accrued interest on financial statements LO $9-1$

Bill Darby started Darby Company on January $1,$ Year $1.$ The company experienced the following events during its first year of

operation:

Earned $$1,400$ of cash revenue,

Borrowed $$2,600$ cash from the bank.

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 $4$ 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 $($I$)$ 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.

Complete this question by entering your answers in the tabs below.

What is the amount of interest payable at December $31,$ Year $1?$

Note: Do not round intermediate calculations. Round your answer to the nearest dollar amount.

What is the amount of interest expense in Year $1?$

Note: Do not round intermedlate calculations. Round your answer to the nearest dollar amount.

What is the amount of interest paid in Year $1?$

Complete this question by entering your answers in the tabs below.

avy of the flaments should be left Blank. The frak transaction has been recorded as an example.

Note: Not all cells will require an input.

$$ Req $A$ in $C$