On January 1, Year 1, Residence Company issued bonds with a…
On January 1, Year 1, Residence Company issued bonds with a $65,000 face value. The bonds were issued at face value. They had a 20-year term and a stated rate of interest of 7%. Which of the following shows how the payoff of the bond liability will affect Residence’s financial statements on December 31, Year 20 (the maturity date)? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders’ EquityRevenues−Expenses=Net IncomeA. = + − = (65,000) IAB. = + − = (65,000) FAC.65,000=65,000+ − = 65,000 IAD.(65,000)=(65,000)+ − = (65,000) FA