A Company Receives $102,000 When It Issues a Bond with a Face

question 109

Multiple Choice

A company receives $102,000 when it issues a bond with a face value of $100,000 and a stated interest rate of 7%.Which of the following statements is true?

• A)The annual interest expense is $7,000.
• B)The market interest rate is 7%.
• C)A contra account to bonds payable is not needed.
• D)The face value of the bond on maturity will be $100,000.

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Definitions:

Intrinsic Motivation

The drive to engage in an activity for its own sake and personal rewards, rather than for some separate consequence.

Milgram's Experiment

An experiment focusing on the conflict between obedience to authority and personal conscience.

Representative Sample

A subset of a population carefully chosen to accurately reflect the characteristics of the larger group, ensuring that the results of a study can be generalized.

Descriptive Statistics

Statistical methods used to summarize, show, and analyze data sets to describe their main features often through graphs, tables, and numerical summaries.