A Corporate Bond Sold in 2000 with a Face Value

question 99

Multiple Choice

A corporate bond sold in 2000 with a face value of $10,000, a $100 coupon, and a maturity date in 2010

• A)will pay the bondholder $100 a year every year from 2000 to 2010 and will also pay him $9,000 in 2010.
• B)will pay the bondholder $100 a year every year from 2000 to 2010 and will also pay him $10,000 in 2010.
• C)requires the bondholder to pay $100 a year every year from 2000 to 2010 and will pay him $10,000 in 2010.
• D)requires the bondholder to pay $100 in 2000 only and will pay him $10,000 in 2010.

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Definitions:

Conversion Cost

Costs incurred during the transformation of raw materials into finished products, mainly consisting of direct labor and manufacturing overhead.

Total Materials Cost

The sum of all costs associated with the raw materials used in the production of a product.

Equivalent Units

A measure used in cost accounting to express the amount of work done on partially finished goods as a proportion of finished goods.

Conversion Cost

The direct costs of converting raw materials into finished products, including labor and manufacturing overhead.