On May 1, 2013, Metro Company Has Bonds with Balances

question 36

Multiple Choice

On May 1, 2013, Metro Company has bonds with balances as shown below. If Metro retires the bonds for $52,000, what will be the effect on the income statement?

• A)There will be a loss on retirement of $3,140.
• B)There will be a gain on retirement of $3,140.
• C)There will be sales revenue of $3,140.
• D)There will be no effect on net income.

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Definitions:

PCAOB

The Public Company Accounting Oversight Board, a nonprofit corporation established by Congress to oversee the audits of public companies, ensuring the accuracy and reliability of financial statements.

FASB

The Financial Accounting Standards Board, responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States.

Annual Report

A comprehensive report detailing a company's activities, financial performance, and operations over the previous financial year.

Interim Financial Statements

Financial reports that are issued for periods of time shorter than the company's full fiscal year, intended to provide an update on the company's financial progress.