Miller Corp

question 32

Multiple Choice

Miller Corp.purchased $1,000,000 of bonds at 95 when the market yield was 10%.The bonds pay interest at the rate of 8%.Miller intends to hold these bonds to maturity and will not need to sell the bonds before that date.Which of the following statements is false?

• A)Since the bonds were issued at a discount,the cash interest will be based on the 8% rate.
• B)Since the bonds were issued at a discount,the book value of the bond investment will increase toward its maturity value.
• C)The company would recognize unrealized gains or losses on the bonds as the discount is amortized.
• D)The bonds will be classified and accounted for as a held-to-maturity investment.

---

Definitions:

Equity Alliance

A collaboration or partnership formed to promote fairness, access, and equal opportunities in various sectors, such as education, healthcare, and employment.

Co-Ownership Arrangement

A legal agreement or structure where two or more parties share ownership rights and responsibilities of a property or asset.

Franchising

A licensing agreement where a franchisor grants a franchisee the right to use its brand, products, and operational model in exchange for a fee.

Greenfield Investment

A form of foreign direct investment where a parent company builds its operations in a foreign country from the ground up.