Correct answer = A
"Analysis of Financing Liabilities," Gerald I. White, Ashwinpaul C. Sondhi, and Dov Fried
2008 Modular Level I, Vol. 3, pp. 466-470
Study Session 9-39-b
determine the effects of debt issuance and amortization of bond discounts and premiums on the financial statements and ratios
The liability and interest expense recorded are both based on market rates of interest when the bond was issued and not the coupon rate on the bond. The market value of the bond at issuance was $961.39. Interest expense is the market rate at date of issuance multiplied by the balance of the liability. ($961.39)(0.05) = $48.07
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发表于 2008-5-24 00:43
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