35. Calculate the effective rate, if the company issued a $ 1,000, 12%, 10 year bond, for 104.

a) 11%

b) 9%

c) 12%

d) 10%

37. Calculate the effective rate, if the company issued a $ 4,000, 7%, 12 year bond at 91?

a)7%

b) 9%

c) 8%

d) 10%

38. Weeds Inc issued a $ 100,000, 10%, 12 year bond at 106. What is the correct entry to record the interest expense on July 1 if the bond was issued on January 1st?

A.

Interest expense 5,250

Premium on bonds payable 250

Cash 5,000

B.

Interest expense 4,750

Premium on bonds payable 250

Cash 5,000

C.

Interest expense 5,000

Discount on bonds payable 250

Cash 5,250

D.

Interest expense 5,000

Cash 5,000

39. How would the investor record his purchase of a $ 100,000, 10%, 14 year bond, at 96?

a) Bond investment 100,000

Cash $ 100,000

b) Bond investment 106,000

Cash 106,000

c) Bond investment 96,000

Bonds payable 96,000

d) Bond investment 96,000

Cash 96,000