[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? Assets=Liab.+Stk.EquityRevenue?Expense=Net Inc.Stmt. ofCash FlowsA.(100)=NA+(100)NA?100=(100)(100)OAB.(100)=(100)+NANA?NA=NA(100)FAC.(80)=(80)+NANA?NA=NA(80)FAD.(80)=NA+(80)NA?80=(80)(80)OA
A. Option A
B. Option B
C. Option C
D. Option D
Answer: A
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