A Company Issued 5-Year, 7% Bonds with a Par Value

question 112

Multiple Choice

A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $102,105 cash for the bonds.
-Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is:

• A) $7,000.00.
• B) $1,750.00.
• C) $3,318.41.
• D) $6,573.90.
• E) $3,500.00.

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Definitions:

Operant Stimulus

A stimulus that follows a behavior and increases or decreases the likelihood of that behavior occurring again; used in operant conditioning.

CS

Conditioning Stimulus; in conditioning, it's the stimulus that, when paired with an unconditioned stimulus, can elicit a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally triggers a reflexive or unlearned response.

Salivation

The secretion of saliva, often in response to the sight, smell, or taste of food, which is part of the digestive process.