Which of the following answers shows the effect of the first interest payment and amortization of premium or discount?

Question

Quizplus · Accepted Answer

$17,500 x 6% = $1,050 interest payment; $17,500 x 2% = $350 discount; $350/5 = $70 annual amortization of discount; The event will decrease assets (cash) by $1,050, increase liabilities (decrease discount on bonds payable) by $70, and increase expenses (interest expense) by $1,120. The payment is reported as a cash outflow for operating activities.

Which of the Following Answers Shows the Effect of the First