A Company Issued Five-Year,7% Bonds with a Par Value of $100,000.The

question 81

Multiple Choice

A company issued five-year,7% bonds with a par value of $100,000.The market rate when the bonds were issued was 6.5%.The company received $101,137 cash for the bonds.Using the effective interest method,the amount of recorded interest expense for the first semiannual interest period is:

• A)$3,500.00
• B)$7,000.00
• C)$3,286.95
• D)$6,573.90
• E)$1,750.00

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Definitions:

Organic Product

A compound resulting from an organic reaction, typically containing carbon atoms along with hydrogen, oxygen, or other elements.

Major

In the context of reactions, it refers to the primary or most abundant product resulting from a chemical process.

Formation

The process of being formed or coming into being; in geology, it refers to a body of rock with a particular set of characteristics.

Reaction

A procedure where substances combine, leading to the creation of new substances.