Riley Company borrowed $24,000 on April 1, Year 1 from the Titan Bank. The note issued by Riley carried a one year term and a 4% annual interest rate. Riley earned cash revenue of $900 in Year 1 and $500 in Year 2. Assume no other transactions.

The amount of net income on the Year 2 income statement would be:

Multiple Choice

$240.

$(20).

$740.

$260.