A Company Receives $102,000 When It Issues a Bond with a Face

question 109

Multiple Choice

A company receives $102,000 when it issues a bond with a face value of $100,000 and a stated interest rate of 7%.Which of the following statements is true?

• A)The annual interest expense is $7,000.
• B)The market interest rate is 7%.
• C)A contra account to bonds payable is not needed.
• D)The face value of the bond on maturity will be $100,000.

---

Definitions:

Temporal Lobe

The region of the brain responsible for processing auditory information, as well as playing key roles in memory, speech, and emotional responses.

Epilepsy

A neurological disorder characterized by recurrent, unprovoked seizures due to abnormal brain activity.

Korsakoff's Syndrome

A chronic memory disorder often caused by severe deficiency of thiamine (vitamin B1), frequently associated with alcoholism.

Anorexia Nervosa

A psychological condition marked by significantly low body weight, a profound dread of weight gain, and a skewed view of one's body size or form.