Trent Corp

question 54

Multiple Choice

Trent Corp.purchased $1,000,000 of bonds at 96 when the market yield was 8%.The bonds pay interest at the rate of 6%.Trent intends to hold these bonds to maturity and will not need to sell the bonds before that date. Which of the following statements is not correct?

• A)Since the bonds were purchased at a discount,the cash interest will be less than interest revenue.
• B)Since the bonds were purchased at a discount,the book value of the bond investment will increase toward its maturity value.
• C)Since the bonds were purchased at a discount,the bond investment will be classified and accounted for as a trading security.
• D)The company would recognize a gain or loss on the bonds if they are sold prior to their maturity date.

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Definitions:

Fast Mapping

The cognitive process by which children rapidly learn and assign meanings to new words with minimal exposure.

Word's Meaning

The definition or significance of a particular term or expression.

Cognitive Scaffolding

A teaching strategy that uses supportive methods to help learners progress beyond their current level of understanding or ability.

Behavioral Scaffolding

A teaching method that involves providing support structures to facilitate a learner's ability to achieve a goal, which are gradually removed as the learner becomes more proficient.