Marvin Company issues $125,000 of bonds at face value on January 1. The bonds carry a...

  

Transcribed Image Text:

Marvin Company issues $125,000 of bonds at face value on January 1. The bonds carry a 6% annual stated rate of interest. Interest is payable in cash on December 31 of each year. Which of the following reflects the financial statement effects of the first interest payment? Assets = Liab. + Equity Revenue- Expense= Net Inc. A.(7,500) B. (7,500)= c.(7,500)=(7,500)+ D.(7,500) = Cash flow %3D (7,500) + (7,500) FA (7,500) FA (7,500) OA (7,500) OA %3D NA NA NA NA %3D NA +(7,500) NA 7,500 = (7,500) NA NA NA %3D NA NA +(7,500) NA -| 7,500 = (7,500) Multiple Choice Choice A Choice D Multiple Choice Choice A Choice D Choice B Choice C Marvin Company issues $125,000 of bonds at face value on January 1. The bonds carry a 6% annual stated rate of interest. Interest is payable in cash on December 31 of each year. Which of the following reflects the financial statement effects of the first interest payment? Assets = Liab. + Equity Revenue- Expense= Net Inc. A.(7,500) B. (7,500)= c.(7,500)=(7,500)+ D.(7,500) = Cash flow %3D (7,500) + (7,500) FA (7,500) FA (7,500) OA (7,500) OA %3D NA NA NA NA %3D NA +(7,500) NA 7,500 = (7,500) NA NA NA %3D NA NA +(7,500) NA -| 7,500 = (7,500) Multiple Choice Choice A Choice D Multiple Choice Choice A Choice D Choice B Choice C

Answer rating: 100% (QA)

Solution Answer Amount of interest paid 125000 x 6 7500 On 31 Dec Cash i... View the full answer