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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![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 bond issuance on the financial statements?
Balance Sheet
Assets = Liabilities +
70,000
68,600
70,000
68,600
A. 70,000
B. 68,600
C. 68,600
D. 70,000
Multiple Choice
O
O
O O
Option D
Option A
Option B
Option C
Stockholders'
Equity
n/a
n/a
(1,400)
1,400
Revenue
n/a
n/a
n/a
n/a
Income Statement
Expense
n/a
n/a
1,400
(1,400)
= Net Income
n/a
n/a
(1,400)
1,400
Statement of Cash Flows
70,000 FA
68,600 FA
68,600 FA
70,000 FA](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fccb668bc-10a4-4aaf-a388-7b2b8ddb3a25%2F6cd35a74-1e2a-420c-96f4-0fe14a43d919%2Foyqedlj_processed.png&w=3840&q=75)
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 bond issuance on the financial statements?
Balance Sheet
Assets = Liabilities +
70,000
68,600
70,000
68,600
A. 70,000
B. 68,600
C. 68,600
D. 70,000
Multiple Choice
O
O
O O
Option D
Option A
Option B
Option C
Stockholders'
Equity
n/a
n/a
(1,400)
1,400
Revenue
n/a
n/a
n/a
n/a
Income Statement
Expense
n/a
n/a
1,400
(1,400)
= Net Income
n/a
n/a
(1,400)
1,400
Statement of Cash Flows
70,000 FA
68,600 FA
68,600 FA
70,000 FA
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