Slumbers,Inc.borrows $3,000 at 12% from a bank on September 1,2012 and agrees to pay the interest and principal in two years.Which of the following will be reported on the year ended December 31,2012 financial statements?
A) The balance sheet will report Interest payable of $120.
B) The income statement will report Interest expense of $0.
C) The statement of cash flows will report Cash paid for interest of $120.
D) The income statement will report Interest expense of $360.
Correct Answer:
Verified
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