In October 2014, Simpson Company loaned $20,000 to Warren Corporation, receiving Warren's 6-month, 6% promissory note. Indicate whether each of the following statements about the note is true or false.
1. Accruing interest receivable at the end of 2014 does not affect the 2014 statement of cash flows
2. Accruing the amount of interest receivable at the end of 2014 is consistent with the matching concept
3. Loaning the money to Warren was an asset use transaction for Simpson
4. Accruing the amount of interest due at the end of 2014 was an asset source transaction for Simpson
5. Simpson's 2014 statement of cash flows would report the loan to Warren as a financing activity

Question

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The Answer of In October 2014, Simpson Company loaned $20,000 to Warren Corporation, receiving Warren's 6-month, 6% promissory note. Indicate whether each of the following statements about the note is true or false.
1. Accruing interest receivable at the end of 2014 does not affect the 2014 statement of cash flows
2. Accruing the amount of interest receivable at the end of 2014 is consistent with the matching concept
3. Loaning the money to Warren was an asset use transaction for Simpson
4. Accruing the amount of interest due at the end of 2014 was an asset source transaction for Simpson
5. Simpson's 2014 statement of cash flows would report the loan to Warren as a financing activity

In October 2014, Simpson Company Loaned $20,000 to Warren Corporation