At the Beginning of 2010, Winston Corporation Issued 10% Bonds

question 67

Multiple Choice

At the beginning of 2010, Winston Corporation issued 10% bonds with a face value of $600,000.These bonds mature in five years, and interest is paid semiannually on June 30 and December 31.The bonds were sold for $555,840 to yield 12%.Winston uses a calendar-year reporting period.Using the effective-interest method of amortization, what amount of interest expense should be reported for 2010? (Round your answer to the nearest dollar.)

• A)$66,500
• B)$66,700
• C)$66,901
• D)$68,832

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Definitions:

Stalagmites

Mineral formations that rise from the floor of a cave due to the accumulation of material deposited by dripping water from the ceiling.

Karst Topography

A landscape formed from the dissolution of soluble rocks such as limestone, dolomite, and gypsum, characterized by underground drainage systems with sinkholes, caves, and disappearing streams.

Steep Pillars

Tall, vertical rock formations resulting from the erosion of surrounding softer material, often seen in high-gradient areas.

Tropical

Relating to or characteristic of the tropics, typically hot and humid climate zones between the Tropic of Cancer and the Tropic of Capricorn.