Revision Company Has Just Made the Interest Payment on Its

question 35

Multiple Choice

Revision Company has just made the interest payment on its $3,000,000 of outstanding bonds. The unamortized discount is currently $127,400. Revision decided to retire the bonds by purchasing the bonds when the bonds were priced at 97. Which statement regarding the retirement is true?

• A)Revision paid $2,910,000 to purchase the bond and recognized a $164,800 loss.
• B)Revision paid $2,910,000 to purchase the bond and recognized a $37,400 loss.
• C)Revision paid $2,872,600 to purchase the bond and recognized a $127,400 loss.
• D)Revision paid $3,000,000 to purchase the bond and recognized a $164,800 loss.

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Definitions:

Mean Square Error

A measure of the average of the squares of the errors or deviations, indicating the difference between estimator and what is estimated.

Total Sum

The aggregation of all values or observations in a dataset.

Model Mean Square

In the context of ANOVA, it refers to the mean squared differences between the observed values and the values predicted by the model.

Observations

Data collected through watching, measuring, and recording phenomena as part of a scientific study or research.