Use the Following Information for Questions

question 4

Multiple Choice

Use the following information for questions.
On July 1, 2017, Casablanca Ltd.issued $6,000,000 (par value) , 9%, ten-year convertible bonds at 98 plus accrued interest.The bonds were dated April 1, 2017 with interest payable quarterly on July 1, October 1, January 1 and April 1.If the bonds had NOT been convertible, they would have sold for 96.1 plus accrued interest.The bond discount is amortized on a straight-line basis.On April 1, 2018, $1,200,000 of these bonds were converted into 500 no par common shares.Accrued interest was paid in cash at the time of conversion.
-If Interest Payable were credited when the bonds were issued, what is the debit to Interest Expense on July 1, 2017?

• A)$129,000
• B)$135,000
• C)$141,000
• D)$143,923

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Definitions:

Incorporation

The process by which the Bill of Rights is applied to state and local governments through the Fourteenth Amendment.

Strict Scrutiny

A standard of judicial review that requires the government to prove that a law which restricts a fundamental right or discriminates against a protected class is necessary to achieve a compelling state interest.

Roe V. Wade

A landmark 1973 United States Supreme Court decision that ruled state laws restricting a woman's right to an abortion during the first trimester of pregnancy were unconstitutional.

Decision

A choice made from among available alternatives in a process of judgment or problem-solving.