On January 1, Year 1, Niagara Corporation arranges a $6,000 line of credit with Centennial Bank. It accepted the bank's offer of 1% above the prime rate with interest payments on December 31 of each year. All borrowings and repayments are to take place on January 1 of each year. Niagara begins its loan transactions with Centennial Bank by borrowing $2,000 on January 1, Year 1. Which of the following shows the effect of this event on the financial statements? Balance Sheet Income Statement Assets = Liabilities + 2,000 n/a n/a 2,000 A. 2,000 B. 2,000 C. 2,000 D. 2,000 Multiple Choice O Option B OOO Option D Option A Option C Stockholders' Equity n/a 2,000 2,000 n/a Revenue n/a 2,000 2,000 n/a Expense n/a n/a n/a n/a = Net Income n/a 2,000 2,000 n/a Statement of Cash Flows 2,000 IA 2,000 IA 2,000 OA 2,000 FA
On January 1, Year 1, Niagara Corporation arranges a $6,000 line of credit with Centennial Bank. It accepted the bank's offer of 1% above the prime rate with interest payments on December 31 of each year. All borrowings and repayments are to take place on January 1 of each year. Niagara begins its loan transactions with Centennial Bank by borrowing $2,000 on January 1, Year 1. Which of the following shows the effect of this event on the financial statements? Balance Sheet Income Statement Assets = Liabilities + 2,000 n/a n/a 2,000 A. 2,000 B. 2,000 C. 2,000 D. 2,000 Multiple Choice O Option B OOO Option D Option A Option C Stockholders' Equity n/a 2,000 2,000 n/a Revenue n/a 2,000 2,000 n/a Expense n/a n/a n/a n/a = Net Income n/a 2,000 2,000 n/a Statement of Cash Flows 2,000 IA 2,000 IA 2,000 OA 2,000 FA
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...
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