A Company Issued 8%,15-Year Bonds with a Par Value of $550,000.The

question 118

Multiple Choice

A company issued 8%,15-year bonds with a par value of $550,000.The current market rate is 8%.The journal entry to record each semiannual interest payment is:

• A) \(\begin{array}{|l|r|r|}
• \hline \text { Bond Interest Expense } & 22,000 & \\
• \hline \text { Cash } & & 22,000 \\
• \hline
• \end{array}\)
• B) \[\begin{array} { | l | c | c | }
• \hline \text { Bond Interest Expense } & 44,000 & \\
• \hline \text { Cash } & & 44,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | c | c | }
• \hline \text { Bond Interest Expense } & 555,000 & \\
• \hline \text { Cash } & & 555,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | c | c | }
• \hline \text { Bond Interest Expense } & 660,000 & \\
• \hline \text { Bond Payable } & & 660,000 \\
• \hline
• \end{array}\]
• E) No entry is needed, since no interest is paid until the bond is due

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Definitions:

Stereotypes

Fixed sets of characteristics that are attributed to all the members of a group; simplistic and rigid perceptions of members of one group that are widely shared by others.

Attribution Error

A cognitive bias that involves misattributing the causes of someone's behavior to their personality, rather than to situational factors.

Normative Expectations

The beliefs or standards considered normal within a specific culture or group, guiding behavior and influencing conformity.

Social Desirability

The tendency of respondents to answer questions in a manner that will be viewed favorably by others, often skewing survey or research results.