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 debt then:

A) Retained Earnings is reduced as the interest payment is treated as a dividend distribution
B) The repayment will decrease owners' equity
C) Shareholders' equity is increased at issuance
D) The interest payment decreases retained earnings