On October 1, Year 1 Hernandez Company loaned $60,000 cash to Acosta Company. The one-year note...

 

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On October 1, Year 1 Hernandez Company loaned $60,000 cash to Acosta Company. The one-year note carried a 6% rate of interest. Which of the following shows how the December 31, Year 1 recognition of accrued interest will affect Hernandez's financial statements? Balance Sheet Income Statement A. B. C. D. Assets = Liabilities + 900 ΝΑ 900 NA 2,700 2,700 Multiple Choice Option A Option B Option C ΝΑ NA Stockholders' Equity 900- 900 2,700 2,700 Revenue - 900 900 2,700 2,700 Expense NA NA NA NA Net Income 900 900 2,700 2,700 Statement of Cash Flows 900 IA NA 2,700 IA NA On October 1, Year 1 Hernandez Company loaned $60,000 cash to Acosta Company. The one-year note carried a 6% rate of interest. Which of the following shows how the December 31, Year 1 recognition of accrued interest will affect Hernandez's financial statements? Balance Sheet Income Statement A. B. C. D. Assets = Liabilities + 900 ΝΑ 900 NA 2,700 2,700 Multiple Choice Option A Option B Option C ΝΑ NA Stockholders' Equity 900- 900 2,700 2,700 Revenue - 900 900 2,700 2,700 Expense NA NA NA NA Net Income 900 900 2,700 2,700 Statement of Cash Flows 900 IA NA 2,700 IA NA

Answer rating: 100% (QA)

Answer On 31 Dec 5 months interest will be accrued an... View the full answer