Test #4 Multiple Choice Portion Choose the best option. Each question is worth 2 points. There are 25 questions. 1. The interest rate written in the terms of the bond indenture is known as the A. market rate B. coupon rate, contract rate, or stated rate C. yield-to-maturity rate D. par rate 2. Under the effective-interest method of bond discount or premium amortization, the periodic interest expense is equal to A. the market rate multiplied by the beginning-of-period carrying amount of the bonds B. the stated (nominal) rate of interest multiplied by the face value of the bonds C. the market rate of interest multiplied by the face value of the bonds D. the stated rate multiplied by the beginning-of-period carrying amount of the bonds 3. On January 1, 2017, Bramble Corp. issued eight-year bonds with a face value of $6,120,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31, The bonds were sold to yield 12% The issue price of the bonds is A. S5,564,916 B. S5,512,896 C. S5,501,519 D. S5,503,716 4. A company issues $15,000,000, 5.8%, 20-year bonds to yield 6% on January 1, 2017, Interest is paid on June 30 and December 31. The proceeds from the bonds are $14,653,278. Using effective- interest amortization, how much interest expense will be recognized on June 30, 2017? A. $439,598 B. $450,000 C. $879,334 D. $379,879 5. A company issues $15,000,000, 5.8%, 20-year bonds to yield 6% on January 1, 2017, Interest is paid on June 30 and December 31. The proceeds from the bonds are $14,653,278. Using effective- interest amortization, what will the carrying value of the bonds be on the June 30, 2017 balance sheet? A. $14,653,278 B. $15,000,000 C. $14,657,876 D. $14,121,000