On January 1,2018,the Prepaid Insurance Account of Dogwood Company Had

question 173

True/False

On January 1,2018,the Prepaid Insurance account of Dogwood Company had a beginning balance of $1,500.Three months of insurance premiums remain in this beginning balance.On February 21,2018,the company paid an annual insurance premium in the amount of $3,400 for the period beginning March 1.On February 28,2018,the balance in Prepaid Insurance is $1,000.

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Definitions:

Interest Rate Risk

The risk that changes in interest rates will negatively affect the value of an investment, especially those with fixed interest rates.

Coupon

The interest rate stated on a bond when it's issued, which represents the annual interest payment made to bondholders.

Payable Semiannually

This term indicates that a payment, often in the context of bond interest or dividends, is made twice a year.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, including both interest payments and capital gains.