Facts: Flash Enterprises provides you with the below unadjusted account balances as of 12/31/2019, all of which are normal: Ref. No 1 Ref. No 17 18 2 3 4 19 20 5 6 21 22 23 7 Account Description $ Cash $26,045 Accounts Receivable 16,000 Employee Note Receivable 7,000 Supplies 2,400 Prepaid Advertising Expense 17,800 Prepaid Insurance Expense 9,745 Vehicle 55,000 Equipment 125,000 Accumulated Depreciation 82,995 Accounts Payable-Gordon Industries 4,400 Dividend Payable 9,000 Interest Payable 0 New Customer Advance 9,000 Rent Payable 0 Salaries Payable 0 Utilities Payable 0 $ $65,000 50,000 12,000 32,000 240,000 5,115 34,000 0 2.240 135 8 Account Description Note Payable Contributed Capital Retained Earnings Dividends Service Fee Revenue Gain on asset disposal Advertising Expense Depreciation Expense Insurance Expense Interest Income Interest Expense Miscellaneous Expense Rent Expense Salaries Expense Supplies Expense Utilities Expense 9 24 25 26 27 28 10 11 0 12 13 29 14 965 28,500 92,000 24,000 4,950 30 31 32 15 16 Short Cut: using the above unadjusted account balances, Flash has net income for the twelve months ended at 12/31/2019 of $58,595. Short Cut: using the above unadjusted account balances, Flash has net income for the twelve months ended at 12/31/2019 of $58,595. On January 8, 2020 Flash received the December 2019 bank statement in the mail, reviewed the activity and reconciled the account. During the reconciliation process Flash discovered numerous reconciling items, one of which is presented below: (1) Earlier in 2019, Flash loaned $7,000 to a company employee experiencing hard times and arranged for the employee to drop off their re-payment at the bank on the loan's December due date. In anticipation of this happening, Flash instructed the bank to deposit the monies into the company's bank account upon receipt. The bank agreed but explained that Flash would be charged a $25 service fee. On December 15th, the employee repaid the full loan plus $210 of interest from which the bank subtracted the $25 service fee prior to depositing the repayment. Required: Select the answer below that shows the entry that Flash would make for the employee's loan repayment (item (1) above). Cash 6,815 Interest Expense 210 A. Note Payable 7,000 Service Fee Income 25 7,210 Cash B. Note Receivable 7,210 7,185 25 Cash Misc Expense C. Note Receivable Interest Income 7,000 210 7,000 Note Payable D. Interest Income Cash 185 6,815 E. Flash would not make an entry for this situation. Cash 7,185 F Note Receivable 7,185