On January 1, Thompson Corporation Issued $3,000,000, 14%, 5-Year Bonds

question 155

Multiple Choice

On January 1, Thompson Corporation issued $3,000,000, 14%, 5-year bonds with interest payable on December 31. The bonds sold for $3,216,288. The market rate of interest for these bonds was 12%. On the first interest date, using the effective-interest method, the debit entry to Interest Expense is for

• A) $360,000.
• B) $376,743.
• C) $385,955.
• D) $420,000.

---

Definitions:

Persistence

The quality of continuing steadfastly or firmly in some action, purpose, or course of action in spite of opposition.

Specific Nerve Energies

The concept that different sensory nerves convey specific qualities of sensations to the brain, such as sight or sound.

Dualism

A philosophical concept that sees mind and body as two distinct entities that interact and influence each other.

Brain

The central organ of the human nervous system, responsible for thought, memory, emotion, touch, motor skills, vision, breathing, temperature, hunger, and every process that regulates our body.