Bluestone Company Issued Bonds with a Face Value of $500,000

Multiple Choice

Bluestone Company issued bonds with a face value of $500,000 on January 1, Year 1 at 90. How would this event affect the company's financial statements?

A) Increase assets (cash) by $450,000, decrease liabilities (discounts on bonds payable) by $50,000, and increase liabilities by $500,000.
B) Increase assets (cash) by $500,000, decrease liabilities (discounts on bonds payable) by $50,000, and increase liabilities by $550,000.
C) Increase assets (cash) by $450,000, decrease liabilities (premium on bonds payable) by $50,000, and increase liabilities by $500,000.
D) Increase assets (cash) by $500,000 and increase liabilities by $500,000.