The Platte Corporation issues a 5-year note payable on January 1, Year 1 for $5,000. The interest rate is 5% and the annual payment of $1,156, due each December 31, includes both interest and principal.

Which of the following correctly shows the effects of the December 31, Year 2 payment (rounded to the nearest whole dollar)?

Net Inc (205) (250) 205 (205) 205 (205) Assets E Liab. +Equity Revenue -Expense cash flow (1,156) FA (906) FA/ (250) OA (951) FA/(205) OA (1,156) OA A.|(1,156)(951) (205) NA 205 - 250 = =1 B.(1,156(906) (250 NA NA C.(1,156)(951) (205) NA NA D. (1,156)(951) + (205) NA