Franklin Company issued a $40,000 note to the Mercantile Bank on August 1, Year 1, The note carried a one-year term and a 12% rate of interest. How will the adjustment, dated December 31, Year 1, to record accrued interest expense impact the elements of the financial statements? Muitiple Choice Decrease assets and decrease retained earnings by $2.000 Increase liablities and decrease equity by $2,000 increase liabilities and decrease equity by $1600