A Company Issues $5,000,000, 7

question 33

Multiple Choice

A company issues $5,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2010.Interest is paid on June 30 and December 31.The proceeds from the bonds are $4,901,036.Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2010 statement of financial position?

• A)$4,903,160
• B)$5,000,000
• C)$4,906,281
• D)$4,902,077

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Definitions:

Weak Justification

An insufficient or unconvincing reason or rationale to support an action, belief, or argument.

Dissonance Level

Refers to the degree of discomfort or conflict someone feels when holding two or more contradictory beliefs, ideas, or values at the same time.

Cognitive Dissonance

A psychological discomfort experienced when holding two or more conflicting beliefs, values, or attitudes simultaneously.

Uncomfortable Tension

A psychological state of discomfort arising from contradictory beliefs, thoughts, or feelings.