Question
On August 1, Year 1 Hernandez Company loaned $48,000 cash to Acosta Company. The one-year note carried a 5% rate of interest. Which of the
On August 1, Year 1 Hernandez Company loaned $48,000 cash to Acosta Company. The one-year note carried a 5% rate of interest. Which of the following shows how the accrual of interest revenue in Year 2 will effect Hernandezs financial statements?
| Balance sheet | Income Statement | Statement of Cash Flows | |||||||||
| Assets | = | Liab. | + | Equity | Rev. | Exp. | = | Net Inc. | |||
| A. | 1,400 | = | NA | + | 1,400 | 1,400 | NA | = | 1,400 | NA | |
| B. | 1,400 | = | NA | + | 1,400 | 1,400 | NA | = | 1,400 | 1,400 OA | |
| C. | 1,000 | = | NA | + | 1,000 | 1,000 | NA | = | 1,000 | NA | |
| D. | 1,000 | = | NA | + | 1,000 | 1,000 | NA | = | 1,000 | 2,400 OA | |
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Introduction To Financial Accounting
Authors: CHARLES T. HORNGREN AND ET ALL.
11th Edition
9352862473, 978-9352862474
