[The following information applies to the questions displayed below.]On August 1, Year 1, Jackson Company issued a one-year $80,000 face value interest-bearing note with a stated interest rate of 9% to Galaxy Bank. Jackson accrues interest expense on December 31, Year 1, its calendar year-end.What is the amount of interest expense and the cash outflow for interest during the year ending December 31, Year 1?Interest ExpenseCash Outflow
A.
| $7,200 | $7,200 |
B.
| $7,200 | $0 |
C.
| $3,000 | $3,000 |
D.
| $3,000 | $0 |
Answer: D
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