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Question - Bill Darby started Darby Company on January 1, 2018. 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, 2018, had a one-year term and an 8 percent annual interest rate.
A. What is the amount of interest expense to record for 2018?
B. What amount of cash was paid for interest in 2018?
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