Question

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 correct?

A) The entry to record the issuance will include a credit to Bonds Payable for $102,000.

B) The market interest rate is 7%.

C) The annual interest expense is $7,000.

D) The carrying value of the bonds will be $100,000 at maturity.

Answer

This answer is hidden. It contains 511 characters.