LO 1 Exercise 7-2 Effects of recognizing accred interest on financial statements Scott Perkins started Perkins Company on January 1, 2012. The company experienced the fol lowing during its first year of operation 1. Famed $1,500 of cashree for performing services 2. Horrowed 52.400 cash from the bank 1 Adjusted the accounting records to recovered interest on the banknote The noteid on Aucul. 2012, had a one-year term anda 7 percentual interest rate Required . What is the amount of interest expense in 2012 What amount of cash was paid for interest in 2012 e. Use a horizontal statements model to show how each event afects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (I decreases or does not affect (NA) each element of the financial statements. In the Cash Flows column desnate the cash flow is operating activities O e sting activities (Alor financing tivities FA The first transaction has been recorded as an example Balance Sheet Incere S et Statement of Cash Flows Cash + + Ret Earn Re Nettine - - Nules Puy NA Int. Pay. NA Com. Sth. NA + + - Exp - - NA - OA