Bonds Are Issued on June 1 That Have Interest Payment

question 56

Multiple Choice

Bonds are issued on June 1 that have interest payment dates of April 1 and October 1. Bond interest expense for the year ended December 31, 2009, is for a period of:

• A)Three months.
• B)Four months.
• C)Six months.
• D)Seven months.The interest expense is for the time the bonds were outstanding during the reporting period - 7 months in this case.

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Definitions:

Redemption Date

The specific date at which a bond or other debt instrument can be repaid before its maturity.

Initial Public Offerings

The process by which a private company offers shares to the public in a new stock issuance to raise capital.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for regulating the securities industry and protecting investors.

Prospectus Approval

Prospectus approval is the formal authorization for the issuance of a prospectus by regulatory authorities, detailing a company's financials and operations for investors.