On January 1, Year 1, Residence Company issued bonds with a $50,000 face value. The bonds were issued at face value. They had a 20 year term and a stated rate of interest of 7%. Which of the following shows how the recognition of interest expense will affect Residence's financial statements on December 31, Year 14? Balance Sheet Income Statement Statement of Assets Liab. + Equity Rev. A. (3,500) NA B. (3,500)- NA + + (3,500) NA Exp. -3,500- Net Inc. (3,500) Cash Flows (3,500) FA (3,500) NA -3,500 - (3,500) (3,500) OA C. (3,500) D. (3,500) (3,500) + (3,500) + NA NA NA NA 3,500 -3,500 (3,500) (3,500) OA - (3,500) (3,500) FA Multiple Choice Option A Option B