On July 1, 2012, Beta Inc. issues $3,000,000 face value seven-year bonds with annual interest payments of $150,000 to be paid each June 30. The market interest rate is 7.5%. According to the effective interest rate method of amortization, Beta is most likely to report: Select one: A. an interest expense of $150,000 the June 30, 2013 income statement. B. a cash inflow of $195,207 from operating activities in the June 30, 2013 statement of cash flow. C. a liability of $2,647,962 in the June 30, 2013 balance sheet.

On July 1, 2012, Beta Inc. issues $3,000,000 face value seven-year bonds with annual interest payments of $150,000 to be paid each June 30. The market interest rate is 7.5%. According to the effective interest rate method of amortization, Beta is most likely to report: Select one: A. an interest expense of $150,000 the June 30, 2013 income statement. B. a cash inflow of $195,207 from operating activities in the June 30, 2013 statement of cash flow. C. a liability of $2,647,962 in the June 30, 2013 balance sheet.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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