A Company Receives $102,000 When It Issues a Bond with a Face

question 13

Multiple Choice

A company receives $102,000 when it issues a bond with a face value of $100,000 and a stated interest rate of 7%.Which of the following statements is true?

• A)The annual interest expense is $7,000.
• B)The market interest rate is 7%.
• C)A contra account to bonds payable is not needed.
• D)The carrying value of the bonds will be $100,000 at maturity.

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Definitions:

Stereotype

Widely shared and simplified evaluative image of a social group and its members.

Schema

Cognitive structure that represents knowledge about a concept or type of stimulus, including its attributes and the relations among those attributes.

Prototype

An original model or first version of a product or concept from which later versions are developed or copied.

Mental Health Clinicians

Professionals specialized in diagnosing and treating mental, emotional, and behavioral disorders, often providing therapy and counseling.