Problemon december 31 iou corporation issued 100000 of, Ask an Expert

Accounting

Problem:

On December 31, IOU Corporation issued $100,000 of 10-year bonds at 98. The bonds pay interest annually on Decemebr 31. These bonds sold at 98 because____?

A. The stated interest rate was higher than the market rate of interest

B. The stated interest rate was lower than the market rate of interest

C. The bond was issued six months after year end

D. This is an installment note

Note: Please show the work not just the answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164473

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