Multiple Choice
[The following information applies to the questions displayed below.]
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 first interest payment and amortization of the premium or discount on the elements of the financial statements?![[The following information applies to the questions displayed below.] 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 first interest payment and amortization of the premium or discount on the elements of the financial statements? A) Option A B) Option B C) Option C D) Option D](https://d2lvgg3v3hfg70.cloudfront.net/TB6522/11ea8a6f_8d56_cb62_a2a1_7122823657bc_TB6522_00.jpg)
A) Option A
B) Option B
C) Option C
D) Option D
Correct Answer:
Verified
Correct Answer:
Verified
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