On August 1, Year 1 Western Company Loaned $40,000 Cash

On August 1, Year 1 Western Company loaned $40,000 cash to Eastern Company. The one-year note carried a 6% rate of interest. The amount of interest revenue on the income statement and the amount of cash flow from operating activities shown on Western's December 31, Year 1 financial statements would be

A) $1,000 interest revenue and $2,400 cash flow from operating activities.
B) $1,400 interest revenue and $2,400 cash flow from operating activities.
C) $1,000 interest revenue and zero cash flow from operating activities.
D) $1,400 interest revenue and zero cash flow from operating activities.