Falcon Enterprises had the following transactions in Year 1:

Falcon issued $22,000 of common stock when the company was started.

In addition, Falcon borrowed $48,000 from a local bank on July 1, Year 1.

The note had a 5 percent annual interest rate and a one-year term to maturity.

Falcon Enterprises recognized $85,700 of revenue on account in Year 1.

Cash collections of accounts receivable were $73,300 in Year 1. Falcon paid $49,800 of other operating expenses in Year 1.

Falcon repaid the loan and interest at the maturity date.

Required: Based on this information given above, record the events in the accounting equation for Year 1 and answer the questions on the following tab.

a. What amount of interest expense would Falcon report on the Year 1 income statement? b. What amount of total liabilities would Falcon report on the December 31, Year 1, balance sheet? c. What amount of retained earnings would Falcon report on the December 31, Year 1, balance sheet?