A Discount on Bonds Payable Occurs When a Company Issues

question 121

True/False

A discount on bonds payable occurs when a company issues bonds with an issue price less than par value.

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Definitions:

Raw Materials

The basic materials that are processed or used in the manufacturing of goods or finished products.

Predetermined Overhead Rate

A calculated figure used for assigning the estimate of manufacturing overhead costs to individual units of production, based on a set rate determined at the beginning of an accounting period.

Direct Materials Cost

The total cost of all the raw materials used in the production of a product or service.

Machine-hours

A measure of the amount of time a machine is operated, used in calculating manufacturing costs and allocating expenses based on machine usage.