On January 2, 2014, Mahoney Sales Issued $10,000 in Bonds

question 151

Multiple Choice

On January 2, 2014, Mahoney Sales issued $10,000 in bonds for $9,400. They were 5-year bonds with a stated rate of 4%, and pay semiannual interest payments. Mahoney Sales uses straight-line method to amortize bond discount. Immediately after issue of the bonds, the ledger balances appeared as follows: After the second interest payment on December 31, 2014, what was the balance in the discount account?

• A)Debit of $540
• B)Debit of $720
• C)Debit of $480
• D)Credit of $660

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Definitions:

Quantifier Negation

The act of negating the quantifier in a logical statement, which changes the scope or range of the statement.

Universal Generalization

A conclusion drawn about all things in a certain category, based on observations or evidence from some members of that category.

Existential Instantiation

A logical rule inferring the existence of at least one instance of a predicate; used in proofs to show something exists.

Universal Instantiation

A principle in logic that allows for the deducing of a statement about a specific instance from a general statement that applies to all instances.