Multiple choice 1. When treasury shares are purchased with cash, what is the impact on the balance sheete quation? a. No change the reduction of the asset cash is offset with the addition of the asset treasury shares b. Assets decrease and shareholders' equity increases. c. Assets increase and shareholders equity decreases d. Assets decrease and shareholders' equity decreases Cash decreases and treasury share, which are contra shareholders equity increases 2. A bond with a face value of $50.000 was issued for 146.750 on January 1, 2014. The coupon rate of interest was 8% a year and the market rate of interest was 10% when the bond was issued. Cash interest is paid annually. How much interest will be paid in cash on December 31, 2014? a. b. $4.000 15.000 13,740 $4.675 C. d. 3. When using the effective interest method of amortization interest expense on bond liability reported in the income statement is impacted by the a. b. Market rate of interest on the date the bonds were issued Coupon rate of interest in the bond certificate Face value of the bonds Market rate of interest on the date interest expense is recognized C. d