[The Following Information Applies to the Questions Displayed Below

question 46

Multiple Choice

[The following information applies to the questions displayed below.]
On January 1, Year 1, Niagara Corporation arranges a $6,000 line of credit with Centennial Bank. It accepted the bank's offer of 1% above the prime rate with interest payments on December 31 of each year. All borrowings and repayments are to take place on January 1 of each year.
-Niagara begins its loan transactions with Centennial Bank by borrowing $2,000 on January 1,Year 1.Which of the following shows the effect of this event on the elements of the financial statements?

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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