On October 1, 2013 a company borrowed $250,000 on a two year, 8% note, with interest and principal to be paid at maturity. How much interest expense will be reported on the income statement for the year ending december 31, 2013? a. $20,000 b. $5,000 C. $15,000 d. $6,000 4. Based on its income for the month, a company estimates that it will owe $23,000 of federal income taxes for the month of May. What is the effect of the adjustment on the financial statement? a. Increase retained earnings b. Increase income taxes expense c. Decrease income taxes payable d. Increase stockholders equity