On November 1, Year 1 Shelter Company loaned $7,000 cash to Cove Company. The one-year note carried
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On November 1, Year 1 Shelter Company loaned $7,000 cash to Cove Company. The one-year note carried a 7% rate of interest. Which of the following shows how the loan will affect Shelter’s financial statements on November 1, Year 1?
| Balance sheet | Income Statement | Statement of Cash Flows | |||||||||
| Assets | = | Liab. | + | Equity | Rev. | − | Exp. | = | Net Inc. | ||
| A. | NA | = | NA | + | NA | NA | − | NA | = | NA | (7,000) IA |
| B. | NA | = | NA | + | NA | NA | − | NA | = | NA | (7,000) FA |
| C. | 7,000 | = | 7,000 | + | NA | NA | − | NA | = | NA | 7,000 FA |
| D. | (7,000) | = | (7,000) | + | NA | NA | − | NA | = | NA | (7,000) IA |
Multiple Choice
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Option A
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Option B
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Option C
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Option D
Expert Answer:
Related Book For 
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
