On July 1, 2012, Beta Inc. issues $3,000,000 face value seven-year bonds with annual interest payments of $150,000 to be paid each June 30. The market interest rate is 7.5%. According to the effective interest rate method of amortization, Beta is most likely to report: Select one: A. an interest expense of $150,000 the June 30, 2013 income statement. B. a cash inflow of $195,207 from operating activities in the June 30, 2013 statement of cash flow. C. a liability of $2,647,962 in the June 30, 2013 balance sheet.

On July 1, 2012, Beta Inc. issues $3,000,000 face value seven-year bonds with annual interest payments of $150,000 to be paid each June 30. The market interest rate is 7.5%. According to the effective interest rate method of amortization, Beta is most likely to report: Select one: A. an interest expense of $150,000 the June 30, 2013 income statement. B. a cash inflow of $195,207 from operating activities in the June 30, 2013 statement of cash flow. C. a liability of $2,647,962 in the June 30, 2013 balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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