What Is the Interest Expense on the Bonds in 2010

question 12

Multiple Choice

What is the interest expense on the bonds in 2010?

• A)$800,000.
• B)$680,759.
• C)$342,961.
• D)$119,241.Semiannual effective rate = $344,632 / $11,487,747 = 3% Interest expense = $341,261 + ($11,316,611 3%) = $680,759

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Definitions:

Fair Insurance Policy

A policy that is considered equitable, offering terms and conditions that are reasonable and just for both the insurer and the insured, without exploiting any party.

Premium

An amount paid for an insurance policy, reflecting the cost of obtaining insurance coverage.

Expected Value

A calculated average of the possible outcomes of a variable, taking into account the likelihood of each outcome.

Fair Insurance Policy

An insurance agreement that is considered equitable and just, providing a balanced distribution of risks and benefits for both insurer and insured.