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 each year. Gordon uses the straight-line method to amortize bond discounts and premiums. hich of the following shows the effect of the bond issuance on the financial statements? Balance Sheet Assets = Liabilities + . 70,000 . . . 68,600 68,600 70,000 Multiple Choice 70,000 68,600 70,000 68,600 Option D Stockholders' Equity n/a n/a (1,400) 1,400 Revenue n/a n/a n/a n/a Income Statement Expense = Net Income n/a n/a 1,400 (1,400) n/a n/a (1,400) 1,400 Statement of Cash Flows 70,000 FA 68,600 FA 68,600 FA 70,000 FA
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 each year. Gordon uses the straight-line method to amortize bond discounts and premiums. hich of the following shows the effect of the bond issuance on the financial statements? Balance Sheet Assets = Liabilities + . 70,000 . . . 68,600 68,600 70,000 Multiple Choice 70,000 68,600 70,000 68,600 Option D Stockholders' Equity n/a n/a (1,400) 1,400 Revenue n/a n/a n/a n/a Income Statement Expense = Net Income n/a n/a 1,400 (1,400) n/a n/a (1,400) 1,400 Statement of Cash Flows 70,000 FA 68,600 FA 68,600 FA 70,000 FA
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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