Which of the following shows the effect of the interest payment and amortization on 12/31/13?

Question

Quizplus · Accepted Answer

$50 premium/5 years = $10 premium amortization; $2,500 x 8% = $200 interest payment; The event will decrease assets (cash) by $200, decrease liabilities (premium on bonds payable) by $10, and increase expenses by $190, which decreases net income and equity. It is reported as a $200 cash outflow for operating activities.

Which of the Following Shows the Effect of the Interest