Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $16,200 of cash revenue
2. Borrowed $12,000 cash from the bank
3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, Year 1, had a one-year term and an 8 percent annual interest rate.
Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows.