A Ten-Year Bond Has a Face Value of $10,000,a Face

question 160

Multiple Choice

A ten-year bond has a face value of $10,000,a face interest rate of 11 percent,an unamortized bond premium of $400,and an effective interest rate of 10 percent.The bonds were issued on one of the semi-annual interest payment dates.The entry to record the bond interest expense on the first semi-annual interest payment date is: (assuming the effective interest method of amortization) ,

• A) Bond Interest Expense 520
• Unamortized Bond Premium 30
• Cash 550
• B) Bond Interest Expense 520
• Cash 520
• C) Bond Interest Expense 550
• Cash 550
• D) Unamortized Bond Premium 520
• Cash 520

Analyze the effects of market and government actions on market equilibrium.

Understand the concept of excess demand (shortage) and excess supply (surplus) in unregulated markets and predict market adjustments.

Recognize the role of normal goods, inferior goods, and factors like income and price changes on market dynamics.

Interpret graphical representations of market shifts and the implications for equilibrium.

---

Definitions:

Fixed Asset Capacity

The maximum output or production level that can be achieved using the existing fixed assets under normal circumstances.

Growth Rate

The measure of an entity's increase in size, value, or quantity over a specific period, often expressed as a percentage.

Excess Capacity Scenario

A situation where a company can produce more goods or services than currently demanded because of available resources exceeding production requirements.

Sales Increase

The rise in the amount of goods or services sold by a company within a specific period.