On January 1, Year 1, Residence Company issued bonds with a $50,000 face value. The bonds were issued at face value. They had a 20 year term and a stated rate of interest of 7%. Which of the following shows how the payoff of the bond liability will affect Residence's financial statements on December 31, Year 20 (the maturity date)? A. B. C. D. Balance Sheet Assets = Liabilities + NA = + = + ΝΑ 50,000 = (50,000) = ΝΑ ΝΑ 50,000 (50,000) + + Multiple Choice O Option A O Option B Option C Option D Equity ΝΑ ΝΑ ΝΑ ΝΑ Revenues ΝΑ ΝΑ ΝΑ ΝΑ Income Statement Expenses = |||| Expenses Net Income ΝΑ ΝΑ ΝΑ ΝΑ ||||||||| = ΝΑ ΝΑ ΝΑ ΝΑ Statement of Cash Flows (50,000) IA (50,000) IFA 50,000 IA (50,000) FA

On January 1, Year 1, Residence Company issued bonds with a $50,000 face value. The bonds were issued at face value. They had a 20 year term and a stated rate of interest of 7%. Which of the following shows how the payoff of the bond liability will affect Residence's financial statements on December 31, Year 20 (the maturity date)? A. B. C. D. Balance Sheet Assets = Liabilities + NA = + = + ΝΑ 50,000 = (50,000) = ΝΑ ΝΑ 50,000 (50,000) + + Multiple Choice O Option A O Option B Option C Option D Equity ΝΑ ΝΑ ΝΑ ΝΑ Revenues ΝΑ ΝΑ ΝΑ ΝΑ Income Statement Expenses = |||| Expenses Net Income ΝΑ ΝΑ ΝΑ ΝΑ ||||||||| = ΝΑ ΝΑ ΝΑ ΝΑ Statement of Cash Flows (50,000) IA (50,000) IFA 50,000 IA (50,000) FA

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 7MCQ

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