Exercise 9-2A (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: 1. Earned $1,700 of cash revenue. 2. Borrowed $3,000 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-yeor term and an 9 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. The first transaction has been recorded as an example