Blanding Company Issues $1,000,000 of 8%, 10-Year Bonds at 98

question 34

Multiple Choice

Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2015. The bond pays interest on February 28 and August 31. On August 31, 2015, how much cash did Blanding pay out to bondholders?

• A)$41,000
• B)$40,000
• C)$80,000
• D)$39,000

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Definitions:

Indeterminate

A situation or outcome that cannot be predicted, decided, or clearly defined.

Total Utility

The complete fulfillment derived from the consumption of a specific amount of products or services.

Marginal Utility

The extra pleasure or advantage obtained from the consumption of an additional unit of a product or service.

Beers

Alcoholic beverages made from fermented grains like barley, often flavored with hops and served as a popular social drink.