Table 15-7 Lex Enterprises Is Considering Alternative Ways of Raising Capital for Capital

question 105

Multiple Choice

Table 15-7
Lex Enterprises is considering alternative ways of raising capital for the purchase of a new factory. One alternative suggested by the controller is the issuance of bonds. After discussions with an underwriter, Lex decides to issue $5,000,000 of 7%, 10-year bonds dated May 1, 2017, with interest payment dates of November 1 and May 1. Lex's year end is December 31. Lex uses the effective-interest method of amortization.
-Refer to Table 15-7.Assuming the bonds were issued on May 1,2017,at 107.44 when the market interest rate was 6%,and the company uses the effective interest method of amortization,the semiannual interest payment on November 1,2017,would include a:

• A) debit to interest expense for $175,000
• B) debit to discount on bonds payable for $13,840
• C) credit to premium on bonds payable for $13,840
• D) debit to interest expense for $161,160

Recognize the role of heroes, rites, rituals, and symbols in the observable culture of an organization.

Identify the differences between corporate culture and organizational culture.

Reflect on the importance of core values in shaping the behavior of organization members.

Understand how strong cultures impact organizational values and performance objectives.

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Definitions:

Reflective Judgment

The cognitive process of critically evaluating the validity of various opinions in the face of uncertainty, leading to well-reasoned conclusions.

Relativistic Thinking

Type of reasoning in which knowledge is viewed as subjective and dependent on the situation.

Metacognition

The awareness and understanding of one's own thought processes, encompassing the ability to monitor, assess, and adapt these processes.

Dualism

The belief or concept that reality or existence is divided into two fundamental parts, often referring to the mind-body distinction in philosophy.