Using the Straight-Line Method,the Semiannual Interest Expense of a 12%,$300,000

question 109

Multiple Choice

Using the straight-line method,the semiannual interest expense of a 12%,$300,000 bond for 15 years at 102 would be:

• A)$20,000.
• B)$18,000.
• C)$17,800.
• D)$35,600.

---

Definitions:

Preferential Lien

A lien that gives the creditor the right to be paid before other creditors if the debtor defaults or assets are liquidated.

Existing Debt

Financial obligations or loans that a person or entity is currently responsible for.

Cram Down

When the court forces dissenting creditors whose claims would be impaired by a proposed plan to accept the plan when the court can find that it is fair and equitable to the class of creditors whose claims are impaired.

Reorganization Plan

A document detailing the process of reconfiguring a company's structure and operations, typically as part of bankruptcy proceedings.