A Company Issued 7%, 5-Year Bonds with a Par Value

question 85

Multiple Choice

A company issued 7%, 5-year bonds with a par value of $100,000. The market rate when the bonds were issued was 7.5%. The company received $97,947 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:

• A) $3,500.00.
• B) $3,673.01.
• C) $3,705.30.
• D) $7,000.00.
• E) $7,346.03.

---

Definitions:

Political Liberal

An individual who favors progressive political policies, advocating for social equality, and typically supporting individual rights and freedoms.

Conciliatory Acts

Actions taken to appease or reconcile with someone, often after a dispute or conflict.

Reciprocity Norm

A social rule stating that people should repay, in kind, what another person has provided for them; it is a basis for exchange in social relationships.

GRIT

A psychological trait based on an individual's passion for a particular long-term goal or end state, coupled with a powerful motivation to achieve their respective objective.