Q1: True or False: The stated rate of interest and the effective rate of interest are synonymous terms. This statement is

Q2: On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 offering a 4% discount. They had a 20 year term, a stated rate of interest of 7%, and an effective rate of interest of 7.389%. Assuming Residence uses the effective interest rate method, the carrying value of the bond liability on January 1, Year 1 is (round any necessary computations to the nearest whole dollar)

A. 46,355

B. 50,000

C. 48,000

D. 46,500

Q3: On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 offering a 4% discount. They had a 20 year term, a stated rate of interest of 7%, and an effective rate of interest of 7.389%. Assuming Residence uses the effective interest rate method, the amount of interest expense recognized on the December 31, Year 1 income statement is (round any necessary computations to the nearest whole dollar)

A. 3,499

B. 3,500

C. 3,547

D. 3,600