VB LtdRaises $150,000 by Issuing a Financial Instrument That Pays Interest

Multiple Choice

VB Ltd.raises $150,000 by issuing a financial instrument that pays interest at a rate of 8% per year to the investor.At the end of the fourth year, the financial instrument is retired for $155,000.If the financial instrument is treated as equity then:

A) The repayment will decrease owners' equity
B) Long-term liabilities is increased at issuance
C) The interest payment decreases retained earnings
D) If premium on repayment was not known, it is recorded as a loss on the income statement