Ginny Incsold $800,000 of Two-Year Bonds for $701,500 Less Commissions of of $50,500.Interest

question 83

Multiple Choice

Ginny Inc.sold $800,000 of two-year bonds for $701,500 less commissions of $50,500.Interest is of 5.5% is payable semi-annually.What is the effective rate of interest (round to 2 decimal places) ?

• A)5.50 %
• B)8.43%
• C)8.65%
• D)17.29%

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Definitions:

Bank Reconciliation

The process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.

Bank Balance

Bank balance refers to the total amount of money available in a bank account at a specific point in time, as recorded by the financial institution.

Book Balance

The balance in a financial account according to a company's accounting records, not necessarily reflective of available funds.

Statement of Cash Flows

A report detailing the total cash received by a company from its operational activities and external investments, alongside the total cash expenditures for business activities and investments over a specific time frame.