r.t jackson

R.T. Jackson started Jackson Company on January 1, 2014. The company experienced the following events during its first year of operation: 1. Earned $3,000 of cash revenue for performing services. 2. Borrowed $4,800 cash from the bank. 3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on August 1, 2014, had a one-year term and a 6 percent annual interest rate. Required a. What is the amount of interest expense in 2014? (Do not round intermediate calculations.) Interest expense b. What amount of cash was paid for interest in 2014? Amount of cash c. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (1), decreases (D), or does not affect (NA) each element of the financial statements. In the Cash Flows column, designate the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The letters NA indicate that an element is not affected by the event. The first transaction has been recorded as an example. c. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (1), decreases (D), or does not affect (NA) each element of the financial statements. In the Cash Flows column, designate the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The letters NA indicate that an element is not affected by the event. The first transaction has been recorded as an example. Event No. Assets JACKSON COMPANY Horizontal Statements Model for 2014 Balance Sheet Income Statement Liabilities + Stockholders' Equity Notes Interest Common Retained Revenue Expenses - + Payable Payable Stock Earnings = NA + NA + NA + 1 NA = Net Income Statement of Cash Flows Cash 1. 1 1 + | + + + eBook & Resources eBook: LO 7-1 Show how notes payable and related interest expense affect financial statements. Check my work