Blanding Company Issues $1,181,000 of 8%,10-Year Debentures at 96 on 28

question 64

Multiple Choice

Blanding Company issues $1,181,000 of 8%,10-year debentures at 96 on 28 February 2017.The debentures pay interest on 28 February and 31 August.The journal entry to record the issue would include a:

• A)credit to Discount on debentures payable for $47,240
• B)debit to Cash for $1,181,000
• C)debit to Cash for $1,133,760
• D)credit to Debentures payable for $1,133,760

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Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, serving as an indicator of producer welfare.

Direct Price Discrimination

A pricing strategy where a business charges different prices to different customers for the same product or service, based on willingness to pay.

Arbitrage

A means to defeat a price discrimination scheme; it occurs when low-value individuals are able to resell their lower-priced goods to the higher-value group.

Low-value Group

A segment of the market or population perceived to have less purchasing power or economic importance.