On March 1, 2015, Uncontracted Capacity Company (UCC) Purchased $20,000

question 71

Multiple Choice

On March 1, 2015, Uncontracted Capacity Company (UCC) purchased $20,000 of Utility Service Corporation's 9% bonds at a purchase price of 90. Uncontracted Capacity Company, whose year end is December 31, expects to hold the bonds until their maturity date 5 years from the date of purchase. Interest on the bonds will be paid every March 1 and September 1 until maturity. Assuming that UCC is a private corporation that elects to amortize premium or discounts using straight-line amortization, how much total interest revenue will be recorded by UCC on September 1, 2015?

• A) $800
• B) $1,100
• C) $900
• D) $1,200

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Definitions:

Sample Statistic

A numerical measure that describes an aspect of a sample drawn from a population.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean.

Standard Deviation

An indicator of the spread or fluctuations in a data set, showing the degree to which the data points deviate from the average value.

Parameter

A numerical characteristic of a statistical population, such as a mean or standard deviation, that describes some aspect of the population.