Exhibit 14-11 Omega, Inc. Issued $100,000 of Its 7% Five-Year Bonds on Bonds

question 153

Multiple Choice

Exhibit 14-11
Omega, Inc. issued $100,000 of its 7% five-year bonds on January 1, 2014, at 98. Interest is paid on January 1 and
July 1. The bonds are callable at 104 and straight-line amortization is used. The bonds are recalled on April 1, 2016.
-Refer to Exhibit 14-11. The journal entry to record the reacquisition of the bonds will include a

• A) debit to Loss on Bond Redemption for $5,100.
• B) credit to Gain on Bond Redemption for $5,000.
• C) debit to Discount on Bonds Payable for $1,100.
• D) debit to Loss on Bond Redemption for $5,200.

Identify the components of total revenue and total cost to determine profit.

Understand opportunity costs and how they influence business decisions.

Identify the normal rate of return and its importance in economic profit calculations.

Analyze the impact of production and pricing decisions in perfectly competitive markets.

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Definitions:

Business Relationship

Business Relationship pertains to interactions and engagements between two or more businesses or between businesses and customers, often defined by contracts or transactions.

Invasion of Privacy

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Public communication in various media forms designed to promote or sell a product, service, or idea.

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Secretly listening to the private conversation of others without their consent.