A Five-Year, $500,000 Bond Was Issued on 1/1/13

question 78

Multiple Choice

A five-year, $500,000 bond was issued on 1/1/13. The stated rate of interest was 8%, and the effective rate of interest was 10%. The interest is paid semiannually. Which of the following statements is correct?

• A)This bond was issued at a premium, and the semiannual cash payment is $25,000 per period.
• B)This bond was issued at a discount, and the annual interest expense is $40,000.
• C)This bond was issued at a discount, and the semiannual cash payment is $20,000 per period.
• D)This bond was issued at a premium, and the annual interest expense is $40,000.

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Definitions:

Perceiver

An individual who observes, interprets, and makes sense of their surroundings, including people, situations, and information.

Inputs

Resources, information, or efforts that are put into a system or process in order to achieve desired outputs or results.

Perceptual Process

The sequence of steps that begins with stimuli in the environment and ends with our interpretation of those stimuli.

Perceptual Process

The sequence of steps that includes receiving, selecting, organizing, interpreting, and responding to sensory information from the environment.