Use the Following to Answer Questions

question 38

Short Answer

Use the following to answer questions
On January 1,2016,the Niagara Corporation arranges a $6,000 line of credit with the 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 records the first year's interest payment on December 31,2016.Centennial's prime rate is 4% for 2016.Which of the following answers shows the effect of this event on the financial statements?

---

Definitions:

Shared Assumptions

The common beliefs or understandings that members of a group or organization hold to be true, often unconsciously, which shape their behaviors and attitudes.

Beliefs

Convictions or acceptances that something exists or is true, especially without proof.

Organizational Ambidexterity

The ability of an organization to balance and manage both exploitative activities (improving existing operations) and exploratory activities (innovation and new opportunities) efficiently.

Innovative Adaptation

The process of adjusting and inventing new methods or products to respond to changing environments or needs creatively.