A Company Receives $102,000 When It Issues a Bond with a Face

question 259

Multiple Choice

A company receives $102,000 when it issues a bond with a face value of $100,000 and a stated interest rate of 7%.Which of the following statements is correct?

• A)The entry to record the issuance will include a credit to Bonds Payable for $102,000.
• B)The market interest rate is 7%.
• C)The annual interest expense is $7,000.
• D)The carrying value of the bonds will be $100,000 at maturity.

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