Handy Corp B) C) D)

Handy Corp. retired bonds payable with a carrying value of $980,000. What effect does this transaction have on total assets and shareholders' equity?

A) $$\begin{array} { | l | l | } \hline \text { Total Assets } & \text { Shareholders' Equity } \\\hline \text { Decrease by } \$ 980,000 & \text { No effect }\end{array}$$
B) $$\begin{array} { | l | l | } \hline \text { Total Assets } & \text { Shareholders' Equity } \\\hline \text { Decrease by } \$ 980,000 & \text { Increase by } \$ 980,000\end{array}$$
C) $$\begin{array} { | l | l | } \text { Total Assets } & \text { Shareholders' Equity } \\\text { Increase by } \$ 980,000 & \text { Increase by } \$ 980,000 \\\hline\end{array}$$
D) $$\begin{array} { | l | l | } \hline \text { Total Assets } & \text { Shareholders' Equity } \\\hline \text { Increase by } \$ 980,000 & \text { Decrease by } \$ 980,000 \\\hline\end{array}$$