210

question 230

Multiple Choice

210. Silk Company issued $500,000 of 7%, 10-year bonds on one of its interest dates for $431,850 to yield an effective annual rate of 9%. The effective-interest method of amortization is to be used. How much bond interest expense (to the nearest dollar) should be reported on the income statement for the end of the first year?

• A)$30,229
• B)$38,867
• C)$45,000
• D)$35,000

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Definitions:

Pentanal

An aldehyde with the formula C5H10O, recognizable by its pungent odor.

HCN

Hydrogen cyanide, a highly toxic compound that is a colorless, volatile liquid with a faint, almond-like odor, used in the production of various chemicals.

Imine

Organic compounds characterized by the functional group C=N, formed by the condensation of an aldehyde or ketone with an amine.

Amino Acid

Organic molecules that serve as the building blocks of proteins, containing both amino and carboxyl functional groups.