[The Following Information Applies to the Questions Displayed Below

question 78

Multiple Choice

[The following information applies to the questions displayed below.]

On January 1, Year 1, Victor Company issued bonds with a $250,000 face value, a stated rate of interest of 6%, and a 5-year term to maturity. The bonds sold at 95. Interest is payable in cash on December 31 of each year. Victor uses the straight-line method to amortize bond discounts and premiums.

-What is the carrying value of the bond liability at December 31,Year 3?

• A)$241,000
• B)$242,500
• C)$237,500
• D)$245,000

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Definitions:

Surplus

A situation where the quantity of a product or service supplied exceeds the quantity demanded at the current price.

Maximum Price

A price ceiling set by the government or another regulatory body, beyond which prices cannot legally rise for essential goods or services.

Economic Impact

The effect of an event, policy, or market change on the economy, which can be measured in terms of changes in employment, GDP, or other economic indicators.

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Living spaces within a building or complex, typically rented, that provide residential accommodation.