On January 1,2015 When the Effective Interest Rate Was 12%,Philips

question 19

Multiple Choice

On January 1,2015 when the effective interest rate was 12%,Philips Co.issued bonds with a maturity value of $200,000.The stated rate of interest is 12% and the bonds pay interest semi-annually.Philips Co.paid $2,000 in bond issue costs on this date.If Philips Co.uses IFRS,the effective interest rate will be

• A)slightly lower than 12%.
• B)slightly higher than 12%.
• C)12%.
• D)Cannot be determined based on the information provideD.

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