Riley Company borrowed $28,000 on April 1, Year 1 from the Titan Bank. The note issued by Riley carried a one year term and a 6% annual interest rate. Riley earned cash revenue of $940 in Year 1 and $900 in Year 2.
Assume no other transactions. The amount of net income on the Year 2 income statement would be:
a. $480
b. $420
c. $1680
d. $1260