Five Thousand Bonds with a Face Value of $1,000 Each

question 184

Short Answer

Five thousand bonds with a face value of $1,000 each, are sold at 102.The entry to record the issuance is

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Definitions:

Period Costs

Expenses incurred by a business that are not directly tied to the production process and are charged to the period in which they occur.

Variable Cost

Expenditures that are directly correlated with the volume of production or output level.

Manufacturing Overhead

All manufacturing costs that are not direct materials or direct labor, including expenses related to running the factory.

Operating Leverage

A measure of how revenue growth translates into growth in operating income. It is an indicator of the fixed versus variable costs in a company's operation.