On January 1,your Company Issues a 5-Year Bond with a Face

question 188

Multiple Choice

On January 1,your company issues a 5-year bond with a face value of $10,000 and a stated interest rate of 7%.The market interest rate is 5%.The issue price of the bond was $10,866.Using the effective-interest method of amortization and rounding to the nearest dollar,the interest expense for the first year ended December 31 would be:

• A) $700.
• B) $543.
• C) $667.
• D) $759.

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Definitions:

Obsessions

Persistent, unwanted thoughts, images, or urges that cause significant anxiety or distress.

Motor Impulses

Nerve signals that initiate muscle contractions, leading to voluntary or involuntary movements.

Obsession

A state in which someone thinks about someone or something constantly or frequently especially in a way that is not normal.

Phobia

An irrational and excessive fear of an object, situation, or activity that causes avoidance and distress.