McDonald Sales Prepared a Bond Issue of $20,000 Dated January

question 115

Multiple Choice

McDonald Sales prepared a bond issue of $20,000 dated January 1,2013.The bonds have a stated rate of 3% and a term of 6 years.The bond issue was delayed,and the bonds were finally sold on March 1,2013 at par.On June 30,2013,the first semiannual interest payment is made.How much will be paid out to bondholders on June 30,2013?

• A) $100
• B) $200
• C) $300
• D) $600

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Definitions:

Cost Behavior

The way in which costs change in relation to changes in a business' levels of activity or production volume.

Related Activity

Activities or actions that are associated with or pertinent to a main activity or topic.

Relevant Range

The range of activity within which assumptions about variable and fixed cost behavior are valid.

Cost

A sacrifice made to obtain some benefit.