Franklin Company issued a $40,000 note to the Mercantile Bank on August 1, Year 1. The note carried a one-year term and a 12% rate of interest. How will the adjustment, dated December 31, Year 1, to record accrued interest expense impact the elements of the financial statements?
Multiple Choice
Decrease assets and decrease retained earnings by $2,000
Increase liabilities and decrease equity by $2,000
Increase liabilities and decrease equity by $1,600
Decrease equity and increase liabilities by $4,800
The following account balances were taken from the adjusted trial balance of Kendall Company:
Revenues $ 26,900
Operating Expenses 16,500
Dividends 6,000
Retained Earnings 18,500
What is the Retained Earnings account balance that will be included on the post-closing trial balance?
Multiple Choice
$28,900.
$22,900.
$4,400.
$10,400.
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