A Discount on Bonds Payable

question 80

Multiple Choice

A discount on bonds payable:

• A) Occurs when a company issues bonds with a contract rate less than the market rate.
• B) Occurs when a company issues bonds with a contract rate more than the market rate.
• C) Increases the Bond Payable account.
• D) Decreases the total bond interest expense.
• E) Is not allowed in many states to protect creditors.

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Definitions:

Incremental

Describes a process of adding or making changes in small, manageable amounts rather than in one large, comprehensive step.

Momentum For Change

The driving force or energy behind movements or developments aimed at transforming or amending current systems, practices, or beliefs.

Unfreezing

The initial stage in the change process where existing behaviors or attitudes are challenged to prepare for change.

Refreezing

The final stage of Lewin's change model where newly adopted behaviors, values, or attitudes are solidified into the organization or individual's practices, ensuring the change is sustained over time.