Joel issues a bond with a stated interest rate of 8%, face value of $100,000,...
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Accounting
Joel issues a bond with a stated interest rate of 8%, face value of $100,000, and due in 3 years. Interest payments are made semi-annually. The market rate for this type of bond is 10%. What is the interest expense for the third payment?
A. $4,746.
B. $4,822.
C. $4,000.
D. $4,952.
Joel issues a bond with a stated interest rate of 8%, face value of $100,000, and due in 3 years. Interest payments are made semi-annually. The market rate for this type of bond is 10%. What is the gain or loss recorded if he retires the bond at the end of the second year for $90,000?
A. a gain of $1,859.
B. a gain of $8,141.
C. a loss of $1,859.
D. a loss of $8,141.
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