Chapter 14: Financing Liabilities: Bonds and Notes Payable
60. Refer to Exhibit 14-1. At date of issuance cash received would be
a.
$280,747.
b.
$287,765.
c.
$292,998.
d.
$299,998.
a
1
Moderate
ACCT.WHAL.16.14.3 – LO: 14.3
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Applying
61. Refer to Exhibit 14-1. The discount at the date of bond issuance would be
a.
$2.
b.
$7,019.
c.
$12,235.
d.
$19,253.
d
1
Moderate
ACCT.WHAL.16.14.3 – LO: 14.3
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Applying
Chapter 14: Financing Liabilities: Bonds and Notes Payable
Exhibit 14-2
A $500,000, ten-year, 7% bond issue was sold to yield 6% interest payable annually. Actuarial information for 10
periods is as follows:
7%
Present value of 1
0.55839
Present value of an annuity of 1
7.36009
62. Refer to Exhibit 14-2. At date of issuance cash received would be
a.
$489,903.
b.
$464,883.
c.
$511,778.
d.
$536,798.
d
1
Moderate
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Applying
63. Refer to Exhibit 14-2. The discount or premium at the date of bond issuance would be
a.
$11,778 premium.
b.
$36,798 premium.
c.
$10,097 discount.
d.
$35,117 discount.
b
1
Moderate
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Applying
Chapter 14: Financing Liabilities: Bonds and Notes Payable
Exhibit 14-3
A $700,000, ten-year, 9% bond issue was sold to yield 10% interest payable annually. Actuarial information for 10
periods is as follows:
10%
Present value of 1
0.38554
Present value of an annuity of 1
6.14456
64. Refer to Exhibit 14-3. At date of issuance cash received would be
a.
$719,114.
b.
$744,923.
c.
$656,985.
d.
$682,794.
c
1
Easy
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Applying
65. Refer to Exhibit 14-4. The discount or premium at the date of bond issuance would be
a.
$44,923 premium.
b.
$19,114 premium.
c.
$43,015 discount.
d.
$17,206 discount.
c
1
Moderate
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Applying
Chapter 14: Financing Liabilities: Bonds and Notes Payable
Exhibit 14-4
A $900,000, ten-year, 4% bond issue was sold to yield 5% interest payable annually. Actuarial information for 10
periods is as follows:
5%
Present value of 1
0.61391
Present value of an annuity of 1
7.72174
66. Refer to Exhibit 14-4. At date of issuance cash received would be
a.
$973,004.
b.
$972,995.
c.
$899,997.
d.
$830,502.
d
1
Moderate
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Applying
67. Refer to Exhibit 14-4. The discount or premium at the date of bond issuance would be
a.
$3 discount.
b.
$69,498 discount.
c.
$72,995 premium.
d.
$73,004 premium.
b
1
Moderate
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Applying
68. The proper procedure for computing the issuance price of a bond includes adding the
a.
maturity value of the bonds to the accrued interest.
b.
maturity value of the bonds to the present value of the interest payments.
c.
present value of the principal to the accrued interest.
d.
present value of the principal to the present value of the interest payments.
d
1
Easy
ACCT.WHAL.16.14.3 – LO: 14.3
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
69. If a company sells its bonds at more than face value, the effective interest rate is
a.
less than the contract interest rate.
b.
more than the contract interest rate.
c.
less than the yield rate.
d.
more than the yield rate.
a
1
Easy
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
70. When is interest expense more than interest paid?
a.
when bonds are sold at a premium
b.
when bonds are sold at a margin
c.
when bonds are sold at a discount
d.
when bonds are sold at a yield
c
1
Easy
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Remembering
71. What type of account is Premium on Bonds Payable?
a.
valuation account
b.
contra account
c.
accumulation account
d.
adjunct account
d
1
Easy
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
72. If a company sells its 20-year bonds at a discount, how is the discount account reported on the balance sheet?
a.
unearned liability
b.
addition to the bonds payable
c.
accrued expense
d.
deduction from bonds payable
d
1
Easy
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
73. On May 1, 2016, Plotter, Inc., issued $30,000 of ten-year, 12% bonds payable dated January 1, 2016. The cash
received amounted to $29,808. The bonds pay interest semiannually. Potter’s fiscal year ends on June 30, 2016. What
amount of interest expense should be reported on the income statement prepared on June 30, 2016, assuming straight-
line amortization?
a.
$603.20
b.
$669.60
c.
$549.60
d.
$609.60
a
1
Moderate
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPORG: Analytic
Bloom’s: Analyzing
74. When a company amortizes a premium, the interest expense recorded is
a.
more than the cash paid.
b.
less than the cash paid.
c.
equal to the cash paid.
d.
b
1
Easy
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
all of the above can be correct.
Exhibit 14-5
Joseph Company had underwriters prepare a bond issue for $100,000 9%, ten-year bonds dated January 1, 2014 The
bonds were issued on March 1, 2014 at 102 plus accrued interest on. Expenses connected with the issue totaled $5,000
and were deducted in arriving at the net proceeds. Joseph amortizes premiums and discounts using the straight-line
method.
75. Refer to Exhibit 14-5. The entry to record the issue would include a debit to Cash for
a.
$97,000.
b.
$98,500.
c.
$99,500.
d.
$102,000.
b
1
Moderate
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Applying
76. Refer to Exhibit 14-5. The entry to record the issue would include
a.
a debit to Bonds Payable for $100,000.
b.
a debit to Interest Expense for $1,500.
c.
a credit to Bonds Payable for $102,000.
d.
a credit to Interest Expense for $1,500
d
1
Easy
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Applying
77. On May 1, 2013, Legacy Corporation sold $250,000 of its 15%, five-year bonds dated January 1, 2013, for 100 plus
accrued interest. How much cash was received?
a.
$237,500
b.
$250,000
c.
$262,500
d.
$268,750
c
1
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Applying
78. On April 1, 2013, Bond Corporation issued 8% debentures dated January 1, 2013. The debentures had a face value of
$3,000,000 and interest was payable on January 1 and July 1. The debentures were sold at par plus accrued interest.
To record this event on April 1, 2013, Everly should debit cash for
a.
$3,080,000.
b.
$3,060,000.
c.
$3,000,000.
d.
$2,920,000.
b
1
Moderate
ACCT.WHAL.16.14.4 – LO: 14.4
United States – BUSPORG: Analytic
Bloom’s: Applying
Chapter 14: Financing Liabilities: Bonds and Notes Payable
Exhibit 14-6
Jones Corporation issued $400,000 of its 8%, 10-year bonds, dated January 1, 2016, at face value plus accrued interest
on May 1, 2016. Interest is paid on January 1 and July 1. Jones uses the most common method to record the sale of
the bonds between interest payment periods.
79. Refer to Exhibit 14-6. The entry to record the sale would include a
a.
credit to Interest Expense for $10,667.
b.
debit to Cash for $400,000.
c.
credit to Bonds Payable for $410,667.
d.
credit to Premium on Bonds Payable for $10,667.
a
1
Challenging
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Analyzing
80. Refer to Exhibit 14-6. The entry to record the payment of interest on July 1, 2016, would include a
a.
credit to Bond Interest Expense for $10,667.
b.
debit to Premium on Bonds Payable for $154.
c.
credit to Cash for $16,000.
d.
debit to Bond Interest Payable for $16,000.
c
1
Challenging
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Analyzing
81. Refer to Exhibit 14-6. The amount of bond interest expense reported on the year-end 2016 income statement would be
a.
$17,538.
b.
$21,333.
c.
$21,384.
d.
c
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Applying
$32,000.
Exhibit 14-7
Magenta Corporation issued $500,000 of its 6%, 10-year bonds, dated January 1, 2016, at face value plus accrued
interest on September 1, 2016. Interest is paid on June 30 and December 31. Magenta uses the most common method
to record the sale of the bonds between interest payment periods.
82. Refer to Exhibit 14-7. The entry to record the sale would include a
a.
debit to Interest Expense for $20,000.
b.
debit to Cash for $505,000.
c.
credit to Bonds Payable for $520,000.
d.
credit to Interest Expense for $20,000.
b
1
Easy
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Understanding
83. Refer to Exhibit 14-7. The entry to record the payment of interest on December, 2016, would include a
a.
debit to Bond Interest Payable for $5,000.
b.
debit to Bond Interest Expense for $15,000.
c.
credit to Cash for $10,000.
d.
credit to Cash for $5,000.
b
1
Easy
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Understanding
84. Refer to Exhibit 14-7. The amount of bond interest expense reported on the year-end 2016 income statement would be
a.
$10,000.
b.
$15,000.
c.
$25,000.
d.
$30,000.
a
1
Easy
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Understanding
85. Interest expense recognized each period on zero-coupon bonds sold at a discount is equal to the
a.
credit to Cash.
b.
difference between the cash payment minus the discount amortization.
c.
credit to Discount on Bonds Payable.
d.
sum of the cash payment plus the discount amortization.
c
1
Easy
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
86. Under the straight-line amortization method, interest expense on a bond sold at a premium is equal to the
a.
interest paid plus bond premium amortization.
b.
interest rate times the book value of the bonds.
c.
interest rate times the face value of the bonds.
d.
interest paid minus bond premium amortization.
d
1
Easy
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
87. The assumption of a stable interest expense per year is inherent under which of the following amortization methods?
a.
present-value method
b.
effective interest method
c.
stated-interest method
d.
d
1
Easy
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
straight-line method
Exhibit 14-8
Piazzi, Inc. sold $400,000 of its 9%, five-year bonds dated January 1, 2013, on May 1, 2013, for $393,000 plus
accrued interest. Interest is paid on January 1 and July 1 and straight-line amortization is used.
88. Refer to Exhibit 14-8. The net liability for the bonds after recording the sale would be
a.
$408,000.
b.
$407,700.
c.
$400,000.
d.
$393,000.
d
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – OH – Default City – AICPA: FN-Measurement
89. Refer to Exhibit 14-8. Interest expense after the July 1, 2013, interest payment has been posted is
a.
$12,500.
b.
$6,250.
c.
$12,000.
d.
$18,000.
b
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Applying
90. Refer to Exhibit 14-8. The balance of Discount on Bonds Payable after the December 31, 2013, adjusting entry has
been posted would be
a.
$5,600.
b.
$6,000.
c.
$7,000.
d.
$8,400.
b
1
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Applying
91. .Under the straight-line amortization method, interest expense on a bond sold at a discount is equal to the
a.
interest paid plus bond discount amortization.
b.
interest rate times the book value of the bonds.
c.
interest rate times the face value of the bonds.
d.
interest paid minus bond discount amortization.
a
1
Easy
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
92. The straight-line method of amortization assumes a constant
a.
interest expense.
b.
interest rate.
c.
book value.
d.
premium or discount balance.
a
1
Easy
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
93. Which statement is true?
a.
The carrying amount of the bonds will decrease each year if the bonds were issued at a discount.
b.
The carrying amount of the bonds will decrease each year if the bonds were issued at a premium.
c.
Total interest expense will increase each year if the bonds are issued at a discount and the straight-line method
of amortization is used.
d.
Total interest expense will increase each year if the bonds are issued at a premium and the effective interest
method of amortization is used.
b
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Understanding
94. Bond issue costs are reported on the financial statements as
a.
Other Assets.
b.
a reduction to Premium on Bonds Payable.
c.
Deferred Liabilities.
d.
an addition to Discount on Bonds Payable.
a
1
Easy
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
95. A theoretical difference between the effective interest method and the straight-line amortization method is that
a.
the effective interest method is easier to use.
b.
the effective interest method can be used if there is a material difference in the computation when compared to
the straight-line method.
c.
the effective interest method produces a result that is based on a constant rate of interest.
d.
the effective interest method produces a result that is based on a constant interest expense.
c
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
Bloom’s: Analyzing
96. The bond interest expense reflected on the income statement should reflect an amount based on the
a.
effective interest rate.
b.
stated interest rate.
c.
nominal interest rate.
d.
face interest rate.
a
1
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Understanding
97. The effective interest method of amortization assumes a stable
a.
interest expense.
b.
interest rate.
c.
book value.
d.
amortization amount.
b
1
Easy
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Remembering
Chapter 14: Financing Liabilities: Bonds and Notes Payable
Exhibit 14-9
Hawk issued $200,000 of its ten-year 10% bonds for $224,924 on October 1, 2016. The effective rate on the bonds
was 8% and interest is paid each October 1 and April 1.
98. Refer to Exhibit 14-9. Assuming Hawk uses the effective interest method, the adjusting entry on December 31, 2016,
would include
a.
a credit to Premium on Bonds Payable for $502.
b.
a credit to Interest Payable for $4,498.
c.
a credit to Interest Payable for $5,000.
d.
a debit to Interest Expense for $5,498.
c
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Analyzing
99. Refer to Exhibit 14-9. Assuming Hawk uses the effective interest method and reversing entries, the entry to record the
payment of interest on April 1, 2017,would include
a.
a debit to Interest Expense for $4,498.
b.
a credit to Premium on Bonds Payable for $502.
c.
a credit to Bonds Payable for $10,000.
d.
a credit to Cash for $8,000.
a
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Analyzing
Chapter 14: Financing Liabilities: Bonds and Notes Payable
Exhibit 14-10
Hawk issued $500,000 of its ten-year 5% bonds for $463,197 on October 1, 2016 so as to yield an effective rate of
6%. Interest is paid each October 1 and April 1.
100. Refer to Exhibit 14-10. Assuming Hawk uses the effective interest method, the adjusting entry on December 31,
2016, would include (rounded to the nearest dollar)
a.
a credit to Discount on Bonds Payable for $698.
b.
a credit to Cash for $6,250.
c.
a debit to Interest Expense for $5,552.
d.
a debit to Interest Expense for $5,790.
a
1
Moderate
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Analyzing
101. Refer to Exhibit 14-10. Assuming Hawk uses the effective interest method and reversing entries, the entry to record
the payment of interest on April 1, 2017, would include (rounded to the nearest dollar)
a.
a credit to Discount on Bonds Payable for $1,396.
b.
a debit to Discount on Bonds Payable for $1,396.
c.
a debit to Interest Expense for $11,580.
d.
a credit to Cash for $12,500.
d
1
Moderate
ACCT.WHAL. – 16.20.1 – LO 20.1
United States – BUSPROG – Reflective Thinking; BUSPROG: Analytic
United States – OH – Default City – AICPA – FN-Decision Modeling
Bloom’s: Analyzing
102. Which of the following statements is true?
a.
The carrying amount of the bonds will increase each year if the bonds were issued at a discount.
b.
The carrying amount of the bonds will increase each year if the bonds were issued at a premium.
c.
Total interest expense will increase each year if the bonds are issued at a discount and the straight-line method
of amortization is used.
d.
Total interest expense will increase each year if the bonds are issued at a premium and the effective interest
method of amortization is used.
a
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Understanding
103. Bond issue costs
a.
should be amortized by the straight-line method to interest expense.
b.
should be included in bond discount or subtracted from bond premium and amortized by the effective interest
method.
c.
should be subtracted from bonds payable on the balance sheet.
d.
should not be amortized and should be written off at bond retirement.
a
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Understanding
104. On January 1, 2016, Snow, Inc. issued $50,000 of ten-year 6% bonds for $43,800. Interest was payable
semiannually. The effective yield was 8%. The effective interest method of discount amortization was used. What
amount of interest expense should be recorded for the six-month period ending December 31, 2016?
a.
$1500.
b.
$1,752
c.
$2,000
d.
$1,762
d
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Analyzing
105. The proper procedure for computing the amortization of a premium using the effective interest method includes
multiplying
a.
the market rate of interest times the face value of the bonds.
b.
the market rate of interest times the carrying value of the bonds.
c.
the stated rate of interest times the face value of the bonds.
d.
the stated rate of interest times the carrying value of the bonds.
b
1
Easy
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Understanding
106. On January 1, 2016, the Keller Co. issued $140,000 of 20-year 8% bonds for $172,000. Interest was payable
annually. The effective yield was 6%. The effective interest method was used to amortize the premium. What amount
of premium would be amortized for the year ended December 31, 2016?
a.
$827.20
b.
$1,804.80
c.
$880.00
d.
$453.20
c
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPORG: Analytic
United States – OH – Default City – AICPA: FN-Measurement
Bloom’s: Analyzing
107. The theoretical justification in support of the effective interest method of amortizing a discount is that it represents
a.
a stable interest expense.
b.
a stable interest rate.
c.
an increasing balance in the discount account.
d.
an increasing balance in the book value account.
b
1
Moderate
ACCT.WHAL.16.14.5 – LO: 14.5
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic
United States – OH – Default City – AICPA: FN-Decision Modeling
Bloom’s: Understanding