Use the Following to Answer Questions

question 40

Multiple Choice

Use the following to answer questions
Wayne Company issued bonds with a face value of $600,000,a 6% stated rate of interest,and a 10-year term.The bonds were issued on January 1,2016,and Wayne uses the straight-line method of amortization.Interest is paid annually on December 31.
-Assuming Wayne issued the bond for 102½,the amount of interest expense appearing on the 2016 income statement would be:

• A)$34,500.
• B)$36,000.
• C)$37,500.
• D)$15,000.

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Definitions:

Horizontal Analysis

Horizontal analysis is a financial analysis technique that compares historical financial data over a series of reporting periods, using the increase or decrease in absolute amounts and percentages to identify trends.

Income Statement

A financial statement that reports a company’s financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.

Unadjusted Trial Balance

A preliminary report that lists all accounts and their balances before any adjustments are made for accruals, deferrals, and errors.

Proper Order

A systematic arrangement or sequence that things follow which conforms to a set of rules or a standard procedure.