A Corporation Issues $200,000, 10%, 5-Year Bonds on January 1

question 23

Multiple Choice

A corporation issues $200,000, 10%, 5-year bonds on January 1, 2014, for $191,600. Interest is paid annually on January 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recognized in December 31, 2014's adjusting entry is

• A) $21,680.
• B) $20,000.
• C) $18,320.
• D) $1,680.

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Definitions:

Core Principles

Fundamental beliefs or values that serve as the foundation for behavior, decision-making, and actions within an organization or individual's life.

Professional Selling

The process and activities required to effectively develop, manage, enable, and execute a mutually beneficial, interpersonal exchange of goods and/or services for equitable value.

Break-Even Point

the point at which total costs and total revenue are equal, meaning a business is neither making a profit nor taking a loss, serving as a critical financial analysis metric.

Direct Costs

Expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor.