Flounder Inc. Use the Information Provided for Flounder Inc. to Answer the to Answer

question 86

Multiple Choice

Flounder Inc.
Use the information provided for Flounder Inc. to answer the question(s) using the effective interest method.
On January 1, 2012, Flounder Inc. issued $800,000, 10-year, 9% bonds for $662,356. The bonds pay interest on June 30 and December 31. The market rate is 12%.
-
Refer to the information provided for Flounder Inc. The interest payment on June 30, 2012, is:

• A) $30,000
• B) $32,237
• C) $31,740
• D) $36,000

---

Definitions:

Profit

The financial gain realized when revenue from business activities exceeds the costs and expenses involved in operating.

Market Rate

The prevailing price or cost of goods, services, wages, or interest rates in the open market.

Natural Gas

A fossil fuel composed mainly of methane, used as an energy source for heating, electricity, and vehicle fuel.

Profit

The financial gain achieved when the revenue from selling goods or services exceeds the costs associated with production and operations.