a bond issue to the market?
The market interest rate
The face or par value of the bond issue
All the four statements are correct
The term to maturity
The stated or nominal interest rate
8?Single Company buys inventory from Double Company on October 1 and gives a 2 month, 12% Note for $6,000. Single defaults on its payment on the maturity date of the Note. The entry that Single should make at this time includes
A credit to interest income of $80
A debit to interest expense of $480
A credit to interest income of $480
None of the above
A debit to interest expense of $80
3?Assume that a firm issues bonds at a discount
Amortization of the discount using the effective interest method will result in a smaller reduction of the Bond Discount in each successive period
None of the above statements are correct
Amortization of the discount using the straight line method will decrease the reported interest expense on the income statement
Amortization using the straight line method produces a constant yield on the bonds which will be by definition equal to the market rate
Amortization of bond discount using the effective line method results in an equal interest expense each period
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