Blanding Company Issues $1 000 000 of 8%, 10- Year

question 8

Multiple Choice

Blanding Company issues $1 000 000 of 8%, 10- year debentures at 98 on 28 February 2014. The debenture pays interest on 28 February and 31 August. The market rate of interest on the issue date was 10%. Assume Blanding uses the straight- line method for amortisation. What net balance will be reported for the debentures on the balance sheet on 31 August 2014?

• A)$1 000 000
• B)$979 000
• C)$980 000
• D)$981 000

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Definitions:

Kaizen

A Japanese term meaning "continuous improvement," it's a business philosophy focusing on the ongoing improvement of processes in manufacturing, engineering, and business management.

Keiretsu

A network of interlinked Japanese companies, often bound by cross-shareholdings, collaborating closely for mutual benefit.

Kanban

A scheduling system for lean manufacturing and just-in-time manufacturing that signals the need to move materials within a production facility or to move materials from an outside supplier into the production facility.

Meishi

The Japanese term for business cards, which play a significant role in business and social etiquette in Japan.