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On January 1, 2014, Behrend Corp. issues 8-year bonds with a total face value of $10,000,000 and a stated interest rate of 5%with interest paid

On January 1, 2014, Behrend Corp. issues 8-year bonds with a total face value of $10,000,000 and a stated interest rate of 5%with interest paid annually each 12/31. The bonds are issued to provide an effective (market) interest rate of6%. Round all amounts to the nearest dollar.

Total interest expense recognized over the entire 8-year term of the bonds is:

$4,000,000.
$3,353,679.
$4,620,979.

Behrend Inc. issued a 10-year, 6% $100,000 note at its face value on October 1, 2014. Interest is paid annually each September 30. The balance sheet at December 31, 2014, will report _________.

notes payable of $100,000 and interest expense of $1,500
notes payable of $100,000 and interest payable of $6,000
notes payable of $100,000 and interest payable of $1,500
notes payable of $100,000 and nothing related to interest because the first interest payment is not payable until September 30, 2015.

none of the above.

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