Riley Company borrowed $32,000 on April 1, Year 1 from the Titan Bank. The note issued by Riley carried a one year term and a 8% annual interest rate. Riley earned cash revenue of $980 in Year 1 and $1,300 in Year 2. Assume no other transactions.

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

Multiple Choice

• $1,920.

• $2,560.

• $660.

• $640.