[The following information applies to the questions displayed below.]On January 1, Year 1, Pierce Corporation issued $25,000 in 8%, 5-year bonds payable at 102. Interest payments are due each December 31. Pierce uses the straight-line method to amortize bond discounts and premiums.On January 1, Year 2, Pierce Corporation called the bonds payable at a price of $25,450. Which of the following shows the effect of this transaction on the elements of the financial statements? Assets=Liab.+Stk.EquityRev.?Exp.=Net Inc.Stmt. ofCash FlowsA.(25,450)=(25,400)+(50)NA?50=(50)(25,450)FAB.(25,450)=(25,400)+(50)NA?50=(50)(25,400)FA/(50)OAC.(25,450)=(25,450)+NANA?NA=NA(25,450)FAD.(25,450)=NA+(25,450)NA?25,450=(25,450)(25,450)OA
A. Option A
B. Option B
C. Option C
D. Option D
Answer: A
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