Exhibit 12-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 74

Multiple Choice

Exhibit 12-2
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Talmart Corporation bonds have a $1,000 face value and will mature in 4 years. The bonds have a 7% coupon rate. Interest is paid annually and the required rate of return is 6% for these bonds.
-Refer to Exhibit 12-2. What is the price of the Talmart corporate bonds?

• A) $965.63
• B) $966.13
• C) $1,034.65
• D) $1,135.10
• E) $1,051.97

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Definitions:

Consistency Principle

An accounting principle that requires entities to apply the same accounting methods and policies from period to period unless a change is justified and disclosed.

Accounting Methods

The specific rules and procedures used by a business to prepare its financial statements, including how it recognizes revenue and expenses.

Revenue Recognition

Revenue recognition is an accounting principle that outlines the specific conditions under which revenue is recognized and dictates how to account for it.