Crystal Glassware Company Issues $1,042,000 of Its 14%,10-Year Bonds at 97

question 160

Multiple Choice

Crystal Glassware Company issues $1,042,000 of its 14%,10-year bonds at 97 on February 28,2019.The bonds pay interest on February 28 and August 31.Assume that Crystal uses the straight-line method for amortization.What net amount will be reported for the bonds on the August 31,2019 balance sheet?

• A) $1,012,303
• B) $1,042,000
• C) $1,009,177
• D) $1,010,740

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Definitions:

Taxes

Mandatory financial charges or levies imposed by a government on its citizens to fund public expenditure and services.

Generalized Reciprocity

A form of exchange that involves giving goods or services with the expectation that their value will be reciprocated at an unspecified future time.

Negative Reciprocity

A mode of exchange in which the aim is to get something for as little as possible. Neither fair nor balanced, it may involve hard bargaining, manipulation, outright cheating, or theft.

Redistribution

A mode of exchange in which goods flow into a central place, where they are sorted, counted, and reallocated.