[The following information applies to the questions displayed below.]On January 1, Year 1, the Platte Corporation issues a 5-year note payable for $5,000. The interest rate is 5% and the annual payment of $1,156, due each December 31, includes both interest and principal.Which of the following shows the effect of the December 31, Year 1 payment? Assets=Liab.+Stk.EquityRevenue?Expense=Net Inc.Stmt. ofCash FlowsA.(1,156)=(1,156)+NANA?NA=NA(1,156)FAB.(1,156)=(906)+(250)NA?250=(250)(906)FA/(250)OAC.(1,156)=NA+(1,156)NA?1,156=(1,156)(1,156)OAD.(1,156)=(906)+(250)NA?250=(250)(1,156)FA
A. Option A
B. Option B
C. Option C
D. Option D
Answer: B
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