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enue /a Ja Va Va Income Statement Expense = Net Income n/a 4,200 4,200 4,480 n/a (4,200) (4,200) (4,480) Statement of Cash Flows (4,200) FA (4,480) FA (4,200) OA/(280) FA (4,200) OA

enue /a Ja Va Va Income Statement Expense = Net Income n/a 4,200 4,200 4,480 n/a (4,200) (4,200) (4,480) Statement of Cash Flows (4,200) FA (4,480) FA (4,200) OA/(280) FA (4,200) OA

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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On January 1 Year 1, Gordon Corporation issued bonds with a face value of $70,000, a stated rate of interest of 6%, and a 5-year term to maturity. The bonds were issued at 98. Interest is payable in cash on December 31 each year. Gordon uses the straight-line method to amortize bond discounts and premiums. Which of the following shows the effect of the first interest payment and amortization of the premium or discount on the financial statements? Assets A. (4,200) B. (4,480) C. (4,480) D. (4,200) Multiple Choice O OOO Balance Sheet Liabilities + (4,200) (280) (280) 280 Option D Option C Option A Option B Stockholders' Equity n/a (4,200) (4,200) (4,480) Revenue n/a n/a n/a n/a Income Statement Expense n/a 4,200 4,200 4,480 = Net Income n/a (4,200) (4,200) (4,480) Statement of Cash Flows (4,200) FA (4,480) FA (4,200) OA/(280) FA (4,200) OA
Transcribed Image Text:On January 1 Year 1, Gordon Corporation issued bonds with a face value of $70,000, a stated rate of interest of 6%, and a 5-year term to maturity. The bonds were issued at 98. Interest is payable in cash on December 31 each year. Gordon uses the straight-line method to amortize bond discounts and premiums. Which of the following shows the effect of the first interest payment and amortization of the premium or discount on the financial statements? Assets A. (4,200) B. (4,480) C. (4,480) D. (4,200) Multiple Choice O OOO Balance Sheet Liabilities + (4,200) (280) (280) 280 Option D Option C Option A Option B Stockholders' Equity n/a (4,200) (4,200) (4,480) Revenue n/a n/a n/a n/a Income Statement Expense n/a 4,200 4,200 4,480 = Net Income n/a (4,200) (4,200) (4,480) Statement of Cash Flows (4,200) FA (4,480) FA (4,200) OA/(280) FA (4,200) OA
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