Larry Cornerstone started a company providing agency services to athletes competing at a professional level. The company

experienced the following events during its first year of operations, Year $1$:

Financed initial operations by borrowing $$28,000$ from a local bank. Interest payments on the loan are not due until the loan fully

matures.

Adjusted the accounting records on December $31,$ Year $1$ to recognize accrued interest expense on the bank note. The note, issued

on July $1,$ Year $1,$ had a one$-$year term and a $8$ percent annual interest rate.

Required:

Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of

cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify

the cash flows as operating activities $($OA$),$ investing activities $($IA$),$ or financing activities $($FA$).$

Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.