On January 1, 2014, Hays Corporation Arranged a $3,000 Line

On January 1, 2014, Hays Corporation arranged a $3,000 line of credit with the Barnett Bank. It agreed to accept the bank's offer of 1% above the prime rate with interest payments on December 31 of each year. All borrowings and payments on principal are to take place on January 1 of each year.
On January 1, 2013, Hays borrowed an additional $1,000 from Barnett Bank, bringing the total amount borrowed to $2,000. On January 1, 2014, Hays paid $500 on the principal of the loan. On December 31, 2014, Hays records the 2014 interest payment. The prime rate for 2014 was 5 percent. Which of the following answers shows the effect of the 2014 interest payment on the financial statements? $$\begin{array} { | c | c | c | c | c | c | c | c | c | c | c | c | } \hline & \text { Assets } & = & \text { Liabilities } & + & \text { Equity } & \text { Revenue } & - & \text { Expenses } & = & \text { Net Inc. } & \text { Cash } \\\hline \text { A) } & ( 75 ) & = & ( 75 ) & + & \text { NA } & \text { NA } & - & \text { NA } & = & \text { NA } & \text { (75) FA } \\\hline \text { B) } & ( 75 ) & = & \text { NA } & + & ( 75 ) & \text { NA } & - & 75 & = & ( 75 ) & \text { (75) OA } \\\hline \text { C) } & ( 90 ) & = & ( 90 ) & + & \text { NA } & \text { NA } & - & \text { NA } & = & \text { NA } & \text { (90) FA } \\\hline \text { D) } & ( 90 ) & = & \text { NA } & + & ( 90 ) & \text { NA } & - & 90 & = & ( 90 ) & \text { (90) } \mathrm { OA } \\\hline\end{array}$$

A) Choice A
B) Choice B
C) Choice C
D) Choice D