On January 1, ABC, Inc., issued $100,000 of 10%, 5-year bonds, for $92,280. Interest is due semiannually. When ABC records the first interest payment, which will be greater the debit to Interest Expense or the credit to Cash?
A. The debit to Interest Expense will be greater because the market rate is greater than the stated interest rate.
B. The debit to Interest Expense will be less because the market rate is greater than the stated interest rate.
C. The debit to Interest Expense will be greater because the market rate is less than the stated interest rate.
D. The debit to Interest Expense will be lower because the market rate is less than the stated interest rate.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On January 1, ABC, Inc., issued $100,000 of 10%, 5-year bonds, for $92,280. Interest is due semiannually. When ABC records the first ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
During the year, Swifty Corporation made an entry to write off a $33900 uncollectible account. Before this entry was made, the balance in accounts receivable was $423000 and the balance in the allowance account was $32500.
Answers (1)
If an economy experiences a decrease in aggregate demand due to a decline in consumer confidence and output falls below potential GDP, which of the following is likely to occur? A. more consumption and less saving B.
Answers (1)
How are employee stock options different from american options?
Answers (1)
When the overhead cranes crashed into each other for the third time, Joe formed a team to look into ways to avoid future crashes. After a brainstorming session, the team settled on three ideas, any of which might work.
Answers (1)
The sustainability of a competitive advantage depends upon the rate of obsolescence of the core competence, the availability of substitutes for the core competence, and the imitability of the core competenc e T/F
Answers (2)
New Questions in Business
Yolanda buys a house in the mountains for $450,000 which she uses as her personal vacation home. she builds an additional room on the house for $40,000.
Answers (1)
Fleet Foot Shoes has been successful at differentiating itself from competitors by claiming a premium price for its athletic footwear based on superior design and high-quality materials.
Answers (1)
Which of the following statements is most likely true of market follower strategies? market followers have the resources to expand the market by developing new users, new uses, and more usage of its products.
Answers (1)
The return on a Futures contract A) is Highly related to the low margin requirement B) is always equal to or greater than zero C) Tends to be fairly stable from one trading day to the next D) is solely related to the current price of the underlying
Answers (1)
On October 15, 2018, a 5% stock dividend was declared and distributed. The fair value of the common stock on this date was $31.8 per share. Fractional share rights represented 100,000 shares. Cash was paid in lieu of issuing fractional share rights.
Answers (1)