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Problem 1: Trevor Williams Company borrowed $10,000 from Mike Trout National Bank on May 1, 2019. Interest on the note, which accumulates at 6% annually, is paid when the loan principal is repaid. The loan remains outstanding on June 30 when both the Williams Company's and the Trout National Bank close their books to prepare financial statements. What is the effect on The Trout National Bank's pre-tax June 2019 income related to the loan?
A) Reduce June's pre-tax income by $50
B) Increase June's pre-tax income by $50
C) Increase June's pre-tax income by $100
D) Reduce June's pre-tax income by $100
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