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

question 37

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%.
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Refer to the information provided for Flounder Inc. The interest expense on the bonds at June 30, 2012, is:

• A) $79,482.77.
• B) $36,000.00.
• C) $39,741.38.
• D) $29,806.04.

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Definitions:

Gainsharing Program

A compensation strategy that shares the financial benefits of performance improvements with employees through collective incentives.

Incentive Pay

Additional compensation awarded to employees for achieving specified goals or exemplary performance.

Performance Measures

Quantitative and qualitative indicators used to assess how well an individual, organization, or system is performing, often against predefined targets or standards.

Previous Year's Profits

The net earnings of an organization in the financial year immediately preceding the current one.