On January 1, Year 1, Niagara Corporation arranges a $6,000…
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 financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenue−Expense=Net IncomeA.2,000=2,000+ − = 2,000 IAB.2,000= +2,0002,000− =2,0002,000 IAC.2,000= +2,0002,000− =2,0002,000 OAD.2,000=2,000+ − = 2,000 FA