Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter dollar amounts.Increase = I Decrease = D Not Affected = NAOn December 31, Year 1, Flagler Corporation had a balance of $20,000 on a line-of-credit with City Bank. Flagler made a payment of $11,200, which included $10,000 on the principal and $1,200 interest. Show the effects of this transaction on the financial statements.
Definitions:
Lien
A legal right or claim against a property by a creditor, securing the payment of a debt or the performance of some obligation.
Secured Interest
An interest in personal property or fixtures that secures payment or performance to a creditor.
Consensual
Involving or based on mutual agreement or consent between the parties involved.
Statutory
Related to or enacted by a statute, referring to laws passed by a legislative body.
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