On May 1 Year 1, Arrow Company borrowed $10,000 from the State Bank at 9 percent annual interest. The noto issued by Arrow had a one-year term. In addition, Arrow reported cosh revenue of $3,400 in Year 1 and $800 in Year 2 from sales Interest is paid when the note is due. Arrow's net income for Year 1 and Year 2 would be Multiple Choice O $2.800/$500 O $2.500/$800 O $2,500/5100 O $2,400 / $800 On August 1. Year 1 Gin Company borrowed $50,000 cash. The one-year note carried a 6% rate of interest Which of the following shows how the accrual of interest expense in Year 1 will affect Gin's financial statements? Balance Sheet Income Statement Stockholders Statement of Cash Assets Tiabilities + Equity Revenue Expense Net Income Plows A. n/a 1,250 (1,250) n/a 1.250 (1.250) n/a 1,250 (1,250) n/a 2250 (1/250) C. 1,250 IA (1,750) (1,750) n/a n/a n/a n/a (1,750) IA D. n/a 1.750 (1.750) n/a 1,750 (1,750) n/a n/a B