Question 14 (of 16) value: 24.00 points Bil Darby started Darby Company on Janua

ID: 2593213 • Letter: Q

Question

Question 14 (of 16) value: 24.00 points Bil Darby started Darby Company on January 1,2016. The company experienced the following 1. Eamed $1,600 of cash revenue. Borrowed $2,100 cash from the bank. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, 2016, had a one-year term and a 8 percent annual interest rate. 2. 3. Required: a. What is the amount of interest payable at December 31, 2016? (Do not round Intermediate calculations. Round your answer to the nearest dollar amount.) b. What is the amount of interest expense in 2016? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) terest expense c. What is the amount of interest paid in 2016? Amount of cash paid d. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (), decreases (D), or does not affect (NA) each element of the financial flows as operating activities (OA), investing activities (IA), or financing g activites (A) or financing activities (FA). The first

Explanation / Answer

Amount of interest payable at dec 31 2016

(2100*8%*4)/12

amount of borrowed amount

2100

Amount of interest expense in 2016

amount of interest paid

Event

Assets

liabilities

shareholders equity

income statement

cash flow statement

cash

notes payable

interest payable

common stock

retained earnings

Revenue

expenses

net income