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 Shelter’s 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 |
Multiple Choice
-
Option A
-
Option B
-
Option C
-
Option D
Step by Step Solution
3.48 Rating (161 Votes )
There are 3 Steps involved in it
Step: 1
Option A is correct loan will affectShel...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Intermediate Accounting
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
1st edition
978-0133251579, 133251578, 013216230X, 978-0134102313, 134102312, 978-0132162302
