1. The market rate of interest for a bond issue that sells for less than its face value is: a. independent of the interest rate stated on the bond. b. higher than the interest rate stated on the bond. c. equal to the interest rate stated on the bond. d. less than the interest rate stated on the bond. 2. Meldiva Inc. has leased equipment with a fair market value of $30,000 from Fair Leasing Corporation. The present value of the lease payments is $28.000. The equipment has an economic life of ten years and the term of the lease is six years. There is no bargain purchase option. Meldiva Inc. makes monthly payments and will not own the equipment at the end of the lease. Meldiva Inc. follows ASPE. The lease will be recorded as: a, an operating lease because there is no transfer of ownership at the end of the lease. b. a capital lease for $28,000. c. an operating lease because the lease payments are monthly and there is no bargain purchase option. d. a capital lease for $30,000. 4. On January 1, 2020 Abbie Corporation issued $500,000 of 6-year, 9% bonds with interest paid semi-annually on July 1 and January 1. The bonds sold for $548.315 when the market rate of interest was 7%. On the first interest payment date, using the effective-interest method of amortization, the amount recorded for Bond Interest Expense will be: I a. $19,191. b. $24.674. C. $17.500 d. $22.500