Use the following to answer questions 6 10

On November 1^st, FLY Tech, an Airline maintenance company, borrows $1,000,000cash from Bank of America to expand operations. FLY signs a 1year,3%promissory note. FLYs year-end is December 31.

6. How was the loan classified on the companys December 31, year 1 balance sheet?

A. Current liability

B. Long term liability

C. Note disclosure only

D. Stockholders Equity

7. How was the loan classified on the companys December 31, year 1 statement of cash flow?

A. Operating activity

B. Investing activity

C. Financing activity

D. Not shown on the statement of cash flows

8. $_________ How much interest should be accrued on December 31 of the first year (assume no previous entry was recorded for interest on the loan)?

9. $______________When the note is paid at maturity (October 31, year 2) how much cash is paid to Bank of America?

10. $_________ When the note is paid at maturity in the second accounting year, how much does net income decrease?