As a Result of a Drop in Interest Rates,a Company

question 24

Multiple Choice

As a result of a drop in interest rates,a company retires bonds which had been issued at their face value of $200,000.The company bought the bonds back at 97.This retirement would be recorded with a:

• A)debit of $200,000 to Bonds Payable,a credit of $6,000 to Gain on Bonds Retired,and a credit of $194,000 to Cash.
• B)debit of $200,000 to Bonds Payable and a credit of $200,000 to Cash.
• C)debit of $200,000 to Bonds Payable,a credit of $6,000 to Interest Expense,and a credit of $194,000 to Cash.
• D)debit of $194,000 to Bonds Payable and a credit of $194,000 to Cash.

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Definitions:

Extrinsic Motivation

Motivation that is driven by external rewards such as money, fame, grades, or praise.

Self-Actualization

The realization or fulfillment of one's talents and potentialities, often considered as a drive or need present in everyone.

Esteem Needs

According to Maslow's hierarchy of needs, the need for self-esteem, achievement, respect, and recognition from others.

Social Needs

Fundamental human requirements for belonging, love, and affection within interpersonal relationships.