Winrow Company Received Proceeds of $565,500 on 10-Year, 8% Bonds

question 94

Multiple Choice

Winrow Company received proceeds of $565,500 on 10-year, 8% bonds issued on January 1, 2013. The bonds had a face value of $600,000, pay interest annually on December 31st, and have a call price of 101. Winrow uses the straight-line method of amortization. What is the amount of interest expense Winrow will show with relation to these bonds for the year ended December 31, 2014?

• A) $48,000
• B) $45,240
• C) $51,450
• D) $44,550

Describe the requirements for an offer to be legally effective.

Explain the doctrine of contractual capacity.

Understand how the law enforces the keeping of promises through contract law.

Identify what constitutes consideration within a contract.

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied and demanded at the equilibrium price, where supply and demand curves intersect.

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price; often leads to price reductions.

Shortage

A situation in which demand for a good or service exceeds the supply available at a specific price. This can lead to long lines, increased prices, or both.

Demand Schedule

A table that lists the quantity of a good a consumer will purchase at various prices in a market.