Bruce Company Experienced an Accounting Event That That Increased Interest

question 117

Multiple Choice

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

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Definitions:

FMV

Fair Market Value, the price at which property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell.

Distribution

The payment of dividends or assets to shareholders or partners from a corporation, partnership, or another type of entity.

Partnership

A type of business structure where two or more people share ownership, as well as the responsibility for managing the business and the income or losses it generates.

Ordinary Income

Income earned through salaries, wages, commissions, and interest, subject to standard tax rates.