The Amazing Widget Company Issues $500 000 of 6%, 10-

question 107

Multiple Choice

The Amazing Widget Company issues $500 000 of 6%, 10- year debentures at 103 on 31 March 2014. The debenture pays interest on 31 March and 30 September. The market rate of interest on the issue date was 4%. Assume the company uses the straight- line method for amortisation. The journal entry to record the first interest payment on 30 September 2014 is a:

• A)credit to Premium on debentures payable for $750.
• B)debit to Interest expense for $14 250.
• C)debit to Cash for $15 000.
• D)debit to Interest expense for $15 750.

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Definitions:

Wheel Bearings

Wheel bearings are mechanical assemblies that support the rotation of a vehicle's wheels, reducing friction and ensuring smooth motion.

Non-Unitized Wheel Hubs

Wheel hub assemblies where the components, including bearings and the hub, are separable and replaceable, contrary to unitized hubs which are sealed.

TMC Method

usually refers to a standard or procedure developed by the Technology & Maintenance Council, aimed at improving commercial vehicle maintenance practices, safety, and efficiency.

ConMet Unitized Hub

A consolidated hub assembly used in vehicle axles, designed to improve reliability and maintenance efficiency by ContiTech.