Question
On November 1, Year 1 Shelter Company loaned $7,000 cash to Cove Company. The one-year note carried a 7% rate of interest. Which of the
On November 1, Year 1 Shelter Company loaned $7,000 cash to Cove Company. The one-year note carried a 7% rate of interest. Which of the following shows how the loan will affect Shelters financial statements on November 1, Year 1?
| Balance sheet | Income Statement | Statement of Cash Flows | |||||||||
| Assets | = | Liab. | + | Equity | Rev. | Exp. | = | Net Inc. | |||
| A. | NA | = | NA | + | NA | NA | NA | = | NA | (7,000) IA | |
| B. | NA | = | NA | + | NA | NA | NA | = | NA | (7,000) FA | |
| C. | 7,000 | = | 7,000 | + | NA | NA | NA | = | NA | 7,000 FA | |
| D. | (7,000) | = | (7,000) | + | NA | NA | NA | = | NA | (7,000) IA | |
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Financial Accounting
Authors: David Perkins
4th Edition
111925700X, 978-1119257004
