The Following Information Applies to Both Questions 77 and 78

question 10

Multiple Choice

The following information applies to both questions 77 and 78.
On October 1, 2014 Macklin Corporation issued 5%, 10-year bonds with a face value of $4,000,000 at 104. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis.
-The entry to record the issuance of the bonds would include a credit of

• A) $100,000 to Interest Payable.
• B) $160,000 to Discount on Bonds Payable.
• C) $3,840,000 to Bonds Payable.
• D) $160,000 to Premium on Bonds Payable.

---

Definitions:

U.S. Equity

Shares that represent ownership in U.S.-based companies and can be traded on American stock exchanges.

Long Term Investments

Assets or securities that an investor holds with the intention to retain for a period of several years or longer.

Life Insurance Companies

Financial institutions that provide coverage that pays out a sum of money either on the death of the insured person or after a set period.

Investment Horizon

The length of time an investor plans to hold a particular investment.