On October 1, Year 1, Tankard Company Borrowed $45,000 from the Bank

Essay

On October 1, Year 1, Tankard Company borrowed $45,000 from the bank and issued a note for that amount. The note had a one-year term and an annual interest rate of 8%.. Perez Company borrowed money from its bank in July Year 1. The accrual of interest on the loan at the end of Year 1:
a)reduces cash flows.b)involves recognition of interest expense.c)does not affect income for Year 1.d)involves recognition of a liability.e)records a cash payment for interest.