A Company Issued 5-Year,7% Bonds with a Par Value of $100,000.The

question 64

Multiple Choice

A company issued 5-year,7% bonds with a par value of $100,000.The market rate when the bonds were issued was 6.5%.The company received $102,105 cash for the bonds.Using the straight-line method,the amount of recorded interest expense for the first semiannual interest period is:

• A)$3,289.50.
• B)$3,500.00.
• C)$3,613,70.
• D)$6,633.70.
• E)$7,000.00.

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Definitions:

Subsidiary

A company that is completely or majority-owned by another company, known as the parent company.

Merger Plan

A detailed proposal for combining two or more companies into one entity, outlining the terms, conditions, and operational strategies post-merger.

Primary Liability

The direct responsibility of an entity or individual to pay a debt or damages without first requiring enforcement against another party.

Model Business Corporation Act

A template law designed to standardize the regulation of corporate affairs in the United States, frequently adopted or adapted by state legislatures.