The transactions in this problem are identical to those in E1–2, but now with a focus on Wildcat.

Transactions	Wildcat’s Related Account
1. Wildcat issues common stock of Falcon.	Common stock
2. Wildcat lends to Falcon by accepting a note.	Notes receivable
3. Wildcat receives services from Falcon.	Service fee expense
4. Wildcat receives interest from Falcon on lending.	Interest revenue

Required:

1. For each transaction, indicate whether Wildcat would report the related account in the balance sheet or income statement.

2. For accounts in the balance sheet, indicate whether it would be classified as an asset, liability, or stockholders’ equity. For accounts in the income statement, indicate whether it would be classified as a revenue or an expense.

3. Indicate whether each transaction is classified as operating, investing, or financing activity.

E1-2

Transactions	Falcon’s Related Account
1. Falcon purchases common stock of Wildcat.	Investment
2. Falcon borrows from Wildcat by signing a note.	Notes payable
3. Falcon provides services to Wildcat.	Service revenue
4. Falcon pays interest to Wildcat on borrowing.	Interest expense