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

question 93

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 issue would include a:

• A)credit to Debentures payable for $515 000.
• B)credit to Discount on debentures payable for $15 000.
• C)debit to Cash for $500 000.
• D)debit to Cash for $515 000.

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Definitions:

Total Control

A management approach where every aspect of a project, process, or organization is under direct control with no external influences.

Gainsharing Plans

Performance-based compensation programs that share the financial benefits of efficiency improvements, increased productivity, or cost savings with employees.

Organizational Resources

Assets, both tangible and intangible, that an organization utilizes to operate and achieve its objectives.

Sales Incentives

Financial or non-financial rewards offered to sales personnel to motivate them to increase sales performance.