Multiple Choice
[The following information applies to the questions displayed below.]
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 records the first year's interest payment on December 31,Year 1.Centennial's prime rate is 4% for Year 1.Which of the following shows the effect of this event on the elements of the financial statements?![[The following information applies to the questions displayed below.] 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 records the first year's interest payment on December 31,Year 1.Centennial's prime rate is 4% for Year 1.Which of the following shows the effect of this event on the elements of the financial statements? A) Option A B) Option B C) Option C D) Option D](https://d2lvgg3v3hfg70.cloudfront.net/TB6522/11ea8a6f_8d4f_ee7b_a2a1_3380d1ed2098_TB6522_00.jpg)
A) Option A
B) Option B
C) Option C
D) Option D
Correct Answer:
Verified
Correct Answer:
Verified
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