The Gordon Corporation issued $70,000 of 6%, 5-year bonds on January 1, Year 1 at 98. The interest payments are due on December 31 each year. Gordon uses the straight-line method of amortization.Which of the following answers shows the effect of the bond issuance on the financial statements? Assets=Liab.+EquityRev.?Exp.=Net Inc.Cash flowA.70,000=70,000+NANA?NA=NA70,000 FAB.68,600=68,600+NANA?NA=NA68,600 FAC.68,600=70,000+(1,400)NA?1,400=(1,400)68,600 FAD.70,000=68,600+1,400NA?(1,400)=1,40070,000 FA

A. Choice A
B. Choice B
C. Choice C
D. Choice D


Answer: B

Business

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