Safeway Company Issued $100,000 of Fixed Interest Rate Bonds Payable

question 106

Multiple Choice

Safeway Company issued $100,000 of fixed interest rate bonds payable at 98.At year-end,the bonds were selling in the bond market at 99.What entry would Safeway make at year-end to record the change in selling price?

• A)Debit Bonds Payable $1,000; credit Interest Expense $1,000.
• B)Debit Interest Expense $1,000; credit Bonds Payable $1,000.
• C)Debit Investment in Bonds $1,000; credit Investment Revenue $1,000.
• D)No entry needed.

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Definitions:

Cognitive Perspective

A psychological approach that focuses on the mental processes involved in knowing, including thinking, memory, problem-solving, and language.

Gestalt Psychologists

Psychologists who study how people integrate and perceive sensory information into meaningful wholes, emphasizing the importance of context and the whole pattern over the sum of its parts.

Humanistic Psychology

The school of psychology that focuses on the uniqueness of human beings and their capacity for choice, growth, and psychological health.

Psychoanalysis

A therapeutic approach and theory of psychology developed by Sigmund Freud that aims to treat mental disorders by investigating the interaction of conscious and unconscious elements in the mind.