Use the Following Information for Questions 47-49

question 38

Multiple Choice

Use the following information for questions 47-49.
On July 2, 2020, Martineau Ltd. issued $ 6,000,000 (par value) , 9%, ten-year convertible bonds at 98. The bonds were dated April 1, 2020 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. The bond discount is amortized on a straight-line basis. On April 1, 2021, $ 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.
-What was the effective interest rate on the bonds when they were issued?

• A) 9%
• B) above 9%
• C) below 9%
• D) cannot determine from the information given

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Definitions:

Post-Anesthesia Care

The immediate care and monitoring of patients recovering from anesthesia to ensure safety and manage pain or complications.

Operative Table

A table specifically designed for patients to lie on during surgical procedures, usually adjustable for different positions.

Intravenous Catheter

A medical device inserted into a vein to deliver fluids, medications, or nutrients directly into the bloodstream, or to draw blood.

Anticoagulant

A substance that prevents blood clotting, often used in medical treatments to prevent strokes and heart attacks.