ooo C Spire LTE 9:14 PM 25% D + ezto.mheducation.com E connect Olivia Bryant Tes
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ooo C Spire LTE 9:14 PM 25% D + ezto.mheducation.com E connect Olivia Bryant Test 5. Chepters 10 and 12. Wayne Company issued bonds with a face value of $600,000, a 6% stated rate of interest, and a 10-year term. The bonds were issued on January 1, 2016, and Wayne uses the straight-line method of amortization. Interest is paid annually on December 31 If Wayne issued the bonds for 96 O the bonds carried a variable or floating rate that changed in response to market conditions O the market rate of interest was equal to the stated rate of interest the market fase ofiterest was higher than ee stated interest fate. the market rate of interest was lower than the stated rate of interest.Explanation / Answer
12) Answer : if Wayne issued the bonds for 96
D) the market rate of interest was lower than the stated rate of interest
10) Answer : A)option A
$25,000 x 102% = $25,500 issue price;
the bond issuance increases assets (cash) and liabilities (bonds payable, plus premium on bonds payable).It is reported as a cash inflow for financing activities.
11) issuing bonds payable when the market interest rate is less than the stated interest rate :
Answer : results in bonds being issued at a premium
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