Lumbers,Inc

Multiple Choice

Lumbers,Inc.lends $3,000 at 12% to an employee on September 1,2012.The employee agrees to pay the interest and principal in two years.Which of the following will be reported on Lumbers' year ended December 31,2012 financial statements?

A) The balance sheet will report Interest receivable of $120.
B) The income statement will report Interest revenue of $0.
C) The statement of cash flows will report Cash received for interest of $120.
D) The income statement will report Interest income of $360.