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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? Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenue Expense = Net Income Statement of Cash Flows A. (4,200) (4,200) n/a n/a n/a n/a (4,200) FA B. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,480) FA C. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,200) OA/(280) FA D. (4,200) 280 (4,480) n/a 4,480 (4,480) (4,200) OA Multiple Choice Option D Option A Option C Option B 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? Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenue Expense = Net Income Statement of Cash Flows A. (4,200) (4,200) n/a n/a n/a n/a (4,200) FA B. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,480) FA C. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,200) OA/(280) FA D. (4,200) 280 (4,480) n/a 4,480 (4,480) (4,200) OA Multiple Choice Option D Option A Option C Option B

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? Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenue Expense = Net Income Statement of Cash Flows A. (4,200) (4,200) n/a n/a n/a n/a (4,200) FA B. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,480) FA C. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,200) OA/(280) FA D. (4,200) 280 (4,480) n/a 4,480 (4,480) (4,200) OA Multiple Choice Option D Option A Option C Option B 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? Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenue Expense = Net Income Statement of Cash Flows A. (4,200) (4,200) n/a n/a n/a n/a (4,200) FA B. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,480) FA C. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,200) OA/(280) FA D. (4,200) 280 (4,480) n/a 4,480 (4,480) (4,200) OA Multiple Choice Option D Option A Option C Option B

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 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...
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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? Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenue Expense = Net Income Statement of Cash Flows A. (4,200) (4,200) n/a n/a n/a n/a (4,200) FA B. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,480) FA C. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,200) OA/(280) FA D. (4,200) 280 (4,480) n/a 4,480 (4,480) (4,200) OA Multiple Choice Option D Option A Option C Option B
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? Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenue Expense = Net Income Statement of Cash Flows A. (4,200) (4,200) n/a n/a n/a n/a (4,200) FA B. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,480) FA C. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,200) OA/(280) FA D. (4,200) 280 (4,480) n/a 4,480 (4,480) (4,200) OA Multiple Choice Option D Option A Option C Option B
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? Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenue Expense = Net Income Statement of Cash Flows A. (4,200) (4,200) n/a n/a n/a n/a (4,200) FA B. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,480) FA C. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,200) OA/(280) FA D. (4,200) 280 (4,480) n/a 4,480 (4,480) (4,200) OA Multiple Choice Option D Option A Option C Option B
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? Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenue Expense = Net Income Statement of Cash Flows A. (4,200) (4,200) n/a n/a n/a n/a (4,200) FA B. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,480) FA C. (4,480) (280) (4,200) n/a 4,200 (4,200) (4,200) OA/(280) FA D. (4,200) 280 (4,480) n/a 4,480 (4,480) (4,200) OA Multiple Choice Option D Option A Option C Option B
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