A Corporation Issues $200,000, 8%, 5-Year Bonds on January 1

question 35

Multiple Choice

A corporation issues $200,000, 8%, 5-year bonds on January 1, 2014, for $208,400. Interest is paid annually on January 1. If the corporation uses the straight-line method of amortization of bond premium, the amount of bond interest expense to be recognized in December 31, 2014's adjusting entry is

• A) $14,320.
• B) $16,000.
• C) $17,680.
• D) $1,680.

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Definitions:

Electric Motor

A machine that converts electrical energy into mechanical energy, used in countless applications from household appliances to industrial machines.

Mechanical Energy

The energy possessed by an object due to its motion or position, capable of producing mechanical work.

Electrical Energy

The form of energy resulting from the flow of electric charge, widely used for domestic, commercial, and industrial applications.

Torque

A measure of the force that can cause an object to rotate about an axis.