On January 1, a Company Issues Bonds Dated January 1

question 119

Multiple Choice

On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the first interest payment using the effective interest method of amortization is:

• A) Debit Interest Expense $12,648.28; debit Premium on Bonds Payable $1,351.72; credit Cash $14,000.00.
• B) Debit Interest Payable $14,000.00; credit Cash $14,000.00.
• C) Debit Interest Expense $12,648.28; debit Discount on Bonds Payable $1,351.72; credit Cash $14,000.00.
• D) Debit Interest Expense $15,351.72; credit Discount on Bonds Payable $1,351.72; credit Cash $14,000.00.
• E) Debit Interest Expense $15,351.72; credit Premium on Bonds Payable $1,351.72; credit Cash $14,000.00.

Understand the concept and legal implications of deceptive pricing.

Identify and differentiate between various types of price fixing, including vertical and horizontal price fixing.

Recognize and understand predatory pricing and its impact on competition.

Distinguish between legal and illegal pricing practices under U.S. law.

---

Definitions:

Dominant Culture

The prevailing cultural norms, values, and practices of the majority group within a society that influence its social institutions and power structures.

Presenting Problems

are the initial concerns or issues brought forth by an individual seeking help or therapy.

Jewish Client

Reference to a client who identifies with or practices Judaism, emphasizing the importance of considering cultural and religious contexts in therapeutic or service-oriented settings.

Intellectualism

The exercise and advocacy of the intellect or the pursuit of knowledge and learning for its own sake.