1) Johansen Company issued a bond at a discount. Which of the following choices accurately reflects how the issue would affect June's financial statements?

	Assets	=	Liab	+	Equity	Revenue	-	Expense	=	Net Inc	Cash Flow
A.	+	=	+	+	NA	NA	-	+	=	-	+OA
B.	+	=	+	+	NA	NA	-	NA	=	NA	+FA
C.	+	=	+	+	-	NA	-	+	=	-	+FA
D.	+	=	+	+	NA	NA	-	NA	=	NA	+OA

a) Option A

b) Option B

c) Option C

d) Option D

2) Issuing bonds payable when the market interest rate is less than the stated interest rate:

a) results in bonds being issued at a premium.

b) results in bonds being issued at less than their face value.

c) raises the effective interest rate above the stated rate of interest.

d) results in bonds being issued at a premium and the effective interest rate is higher than the stated rate.

3) King Company experienced an accounting event that affected its financial statements as indicated below:

Assets	=	Liab.	+	Equity	Rev.	-	Exp.	=	Net Inc.	Cash Flow
-		-		-	NA		+		-	-FA/-OA

Which of the following accounting events could have caused these effects on King's statements?

a) Repaid a bond issued at a discount.

b) Borrowed funds through a line-of-credit.

c) Made a payment on an installment loan.

d) Issued a bond at a discount.