Johnson Company issued $50,000 bonds payable, 9% annual interest, maturity in ten years. The bonds were sold for $50,000. Based on this information, what do we know about the market rate for these bonds when they were sold? Group of answer choices A)The market rate now is higher than it was at the time of sale. B)The market rate of interest was the same as the 9% rate carried by the bonds. c)There is no specific market interest rate for bonds when they are sold. d)The market rate for the bonds was lower than the 9% rate carried by the bonds. E)None of the above
Johnson Company issued $50,000 bonds payable, 9% annual interest, maturity in ten years. The bonds were sold for $50,000. Based on this information, what do we know about the market rate for these bonds when they were sold? Group of answer choices A)The market rate now is higher than it was at the time of sale. B)The market rate of interest was the same as the 9% rate carried by the bonds. c)There is no specific market interest rate for bonds when they are sold. d)The market rate for the bonds was lower than the 9% rate carried by the bonds. E)None of the above
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Johnson Company issued $50,000 bonds payable, 9% annual interest, maturity in ten years. The bonds were sold for $50,000. Based on this information, what do we know about the market rate for these bonds when they were sold?
Group of answer choices
A)The market rate now is higher than it was at the time of sale.
B)The market rate of interest was the same as the 9% rate carried by the bonds.
c)There is no specific market interest rate for bonds when they are sold.
d)The market rate for the bonds was lower than the 9% rate carried by the bonds.
E)None of the above
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