Bruce Company experienced an accounting event that that increased interest expense, decreased the discount on bonds payable, and decreased cash. Which of the following choices accurately reflects how this event would affect Bruce's financial statements?
A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question

Bruce Company experienced an accounting event that that increased interest expense, decreased the discount on bonds payable, and decreased cash. Which of the following choices accurately reflects how this event would affect Bruce's financial statements? 
A) Choice A 
B) Choice B 
C) Choice C 
D) Choice D

Quizplus · Accepted Answer

This transaction increases interest expense, which decreases net income an equity, decreases the contra-liability discount on bonds payable, which increases liabilities, and decreases assets (cash). It is reported as a cash outflow for operating activities.

Bruce Company Experienced an Accounting Event That That Increased Interest