7. The anniversary date of a $100,000, 6% bond is June 30. Interest is payable twice per year. Entries related to interest are recorded each month. The entry to record the payment of interest on December 31 includes a:

a. Debit to interest payable of $2,500; debit to interest expense of $500; credit to cash of $3,000

b. Debit to interest payable of $3,000, credit to cash of $3,000

c. Debit to interest expense of $3,000, credit to cash of $3,000

d. Debit to interest expense of $2,500, credit to interest payable of $2,500

8. While bonds have a stated contractual interest rate (or coupon rate), notes can have one of two types of interest rate. These two types of interest rate are:

a. Fixed and Variable Interest Rate

b. None of the available choices

c. Stated and Effective Interest Rat

e d. Short and Long-term Interest Rate

9. A $100,000 bond bears an interest rate of 6%. The bond was issued at a price of $95,000. The actual amount of interest that the investor would receive each year is

: a. $5,000

b. $5,700

c. $2,850

d. $6,000