Final answer:
Avery Co. most likely borrowed and received loans as a financial instrument.
Step-by-step explanation:
The financial instrument that Avery Co. borrowed and received on January 1, 2020, would most likely be Loans (option D).
When a firm needs to access financial capital, it may choose to borrow from a bank, issue bonds, or issue stock. Borrowing money from a bank in the form of loans is a common method. Banks provide customized borrowing options and can closely monitor the firm's financial activities.
Therefore, on January 1, 2020, Avery Co. most likely borrowed and received loans as a financial instrument.