Rainey Enterprises loaned $40,000 to Small Co. on June 1, Year 1, for one year at 8 percent interest. Required Show the effects of the following transactions in a horizontal statements. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). (Do not round intermediate calculations. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.) (1) The loan to Small Co. (2) The adjustment at December 31, Year 1. (3) The adjustment and collection of the note on June 1, Year 2. Answer is complete but not entirely correct. RAINEY ENTERPRISES Income Statement Date Horizontal Statements Model Equity Interest Retained Receivable Revenue Earnings 0 0 0 Assets Notes Receivable 40.000 + Cash Statement of Cash Flow + + Expense Net Income = 1. (40,000) + 0 = (40,000) IA 2. 0 + + 1,867 1,867 1,867 0 = 1,867 0 3. 6/1/Year 1 12/31/Year 2 6/1/Year 2 6/1/Year 2 6/1/Year 2 + 1,333 1,333 OOOO 1,333 (3,200) = OOOOO 0 OOOOO + OOO + XOOO 0 0 43,200 0 0 = 0 = 0 = (40,000) 0 1,333 0 0 40,000 IA 40,000 81 OA + + 0 0 0