[The following information applies to the questions displayed below.]Baltimore Company issued a $9,000 face value discount note to Bank of the Chesapeake on March 1, Year 1. The note had a 5% discount rate and a one-year term to maturity.How would the adjusting entry to record interest expense on December 31, Year 1 affect the elements of the financial statements? Assets=Liab.+EquityRev.?Exp.=Net Inc.Cash FlowA.NA=375+(375)NA?375=(375)NAB.NA=450+(450)NA?450=(450)NAC.(375)=NA+(375)NA?375=(375)(375) OAD.(450)=(450)+NANA?NA=NA(450) OA
A. Option A
B. Option B
C. Option C
D. Option D
Answer: A
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