A Company Issued 5-Year, 7% Bonds with a Par Value

question 150

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

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Definitions:

Increase Mather

A prominent Puritan clergyman in colonial America, known for his role in the administration of the Massachusetts Bay Colony and his involvement in the Salem witch trials.

English Bill of Rights

An act passed in 1689 that laid down limits on the powers of the monarch and set out the rights of Parliament and rules for freedom of speech within Parliament, forming a foundation for the British constitutional monarchy.

Glorious Revolution

The event in 1688-1689 in which James II of England was overthrown and replaced by William III and Mary II, marking a pivotal shift towards parliamentary sovereignty.

Parliamentary Control

The mechanisms, processes, and practices that ensure the government is accountable and responsive to the legislature or parliament.