Course Content / Final Examination
If 5% bonds are issued at 101.75, this means that:
Select one:
A. The effective rate of interest is higher than 5%.
B. The bonds sold at a discount.
C. The bond rate of interest is 1.75% higher than of the effective rate of interest.
D. A $2,000 bond sold for $2,035.
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Which one of the following is not a reason for which adjusting entries are made?