On January 1,2014 When the Effective Interest Rate Was 14%,a

question 40

Multiple Choice

On January 1,2014 when the effective interest rate was 14%,a company issued bonds with a maturity value of $1,000,000.The stated rate of interest is 12%,the bonds pay interest semi-annually and sold for $893,640.The amount of bond discount amortized on July 1,2014 is approximately

• A)$1,000.
• B)$2,555.
• C)$2,000.
• D)$5,110.

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Definitions:

Loan Due

The date by which a borrower is expected to repay the borrowed amount in full to the lender.

Rights in Bankruptcy

Legal protections and claims a debtor or creditor has during the bankruptcy process, including claims to assets and discharge of debts.

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A legal provision that protects a portion of a homeowner's principal residence from creditors and reduces property tax.

Auction

A public sale in which goods or property are sold to the highest bidder.