A $1,000 Bond, Which Matures in One Year, Has a Price

question 45

Multiple Choice

A $1,000 bond, which matures in one year, has a price of $925. The interest rate on this bond is

• A) 7.5%.
• B) 8.11%.
• C) 9.25%.
• D) 9.20%.

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Definitions:

Revenue

The total income generated by the sale of goods or services related to the company's primary operations.

Unearned Fees

Income received for services that have not yet been performed, similar to unearned revenue but specifically related to service fees.

Fees Earned

Revenue recognized from providing services, as opposed to selling goods.

Adjusting Entry

An accounting record update that adjusts account balances at the conclusion of an accounting period.