[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.Which of the following shows the effect of the interest payment and amortization on December 31, Year 1? Assets=Liab.+Stk.EquityRev.?Exp.=Net Inc.Stmt. ofCash FlowsA.(2,000)=(160)+(1,840)(1,840)?NA=(1,840)(2,000)FAB.(2,000)=(100)+(1,900)NA?1,900=(1,900)(100)FA/(1,900)OAC.(2,000)=(100)+(1,900)NA?1,900=(1,900)(2,000)OAD.(2,000)=NA+NANA?NA=NA(2,000)OA
A. Option A
B. Option B
C. Option C
D. Option D
Answer: C
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