On 1 January 2013, Diab Services Issued $140 000 of 4-

question 36

Multiple Choice

On 1 January 2013, Diab Services issued $140 000 of 4- year debentures with a stated rate of 9%. The market rate at time of issue was 8%, so the debentures were issued with a premium and sold for $144 758. Diab uses the effective- interest method to amortise debenture premium. Half- yearly interest payments are made on 30 June and 31 December of each year. How much interest expense will be recorded when the first interest payment is made?

• A)$6 300
• B)$1 050
• C)$5 790
• D)$11 200

---

Definitions:

Sixteenth-Century

Referring to the period of time from 1501 to 1600, notable for the Renaissance in Europe, exploration, and significant religious reformations.

State Religion

A religion that is officially endorsed and supported by the government of a country.

Executed Protestants

Individuals of the Protestant faith who were put to death for their religious beliefs, often occurring during periods of religious conflict and persecution.

Humphrey Gilbert

An English adventurer and explorer in the Elizabethan era, known for attempting to establish English colonies in North America.