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

question 304

Multiple Choice

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

• A) Cash 4,080,000 Bonds Payable 4,080,000
• B) Cash 4,000,000 Premium on Bonds Payable 80,000
• Bonds Payable 4,080,000
• C) Cash 4,080,000 Premium on Bonds Payable 80,000
• Bonds Payable 4,000,000
• D) Cash 4,080,000 Discount on Bonds Payable 80,000
• Bonds Payable 4,000,000

---

Definitions:

Yield

The income return on an investment, such as the interest or dividends received from holding a particular security.

Annually Compounded

The process where interest is added to the principal sum of a loan or deposit once a year.

Rate of Return

The increase or decrease in the value of an investment during a set timeframe, shown as a percentage of the investment's starting price.

Portfolio

A collection of investments held by an individual or institution, including stocks, bonds, real estate, and other assets.