On March 1, 2012, WC Issued 10% Stated Interest Rate

question 50

Multiple Choice

On March 1, 2012, WC issued 10% stated interest rate, 10 year debentures dated January 1, 2012, in the face amount of $1,000,000, with interest payable on January 1 and July 1.The debentures were sold to yield 8% plus accrued interest.How much should WC debit to cash on March 1, 2012, if the bondholders receive their pro-rata share of coupon on that date?

• A)$901,967
• B)$903,003
• C)$1,152,573
• D)$1,135,927

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Definitions:

Second Continental Congress

The convention of delegates from the Thirteen Colonies that started meeting in the spring of 1775, soon after the outbreak of the American Revolutionary War, which eventually declared independence.

Thomas Jefferson

The third President of the United States (1801–1809), primary author of the Declaration of Independence, and a founding father known for his promotion of the ideals of republicanism in the United States.

Nathanael Greene

A major general of the Continental Army in the American Revolutionary War, who was known for his successful command in the Southern Campaign, forcing British Lieutenant General Cornwallis to abandon the Carolinas and head for Virginia.

Southern Campaign

A phrase often used to describe a series of battles in the southern states during the American Revolutionary War that were crucial to the eventual American victory.