Zinke Company borrowed $100,000 from Plains Bank on July 31, Year 1. The note carried a 6% interest rate with a one-year term to maturity.
Required: 1)Show the effects of borrowing the money and then the adjustment required at the end of Year 1 on the accounting equation.2)What is the amount of interest expense for Year 1?3)How does this transaction affect the statement of cash flows for the Zinke Company for Year 1?

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The Answer of Zinke Company borrowed $100,000 from Plains Bank on July 31, Year 1. The note carried a 6% interest rate with a one-year term to maturity.
Required: 1)Show the effects of borrowing the money and then the adjustment required at the end of Year 1 on the accounting equation.2)What is the amount of interest expense for Year 1?3)How does this transaction affect the statement of cash flows for the Zinke Company for Year 1?

Zinke Company Borrowed $100,000 from Plains Bank on July 31