Paul's Valley Company issued bonds with a $10,000 face value on January 1, 2014. The bonds were issued at face value and carried 5-year term to maturity. They had a 5% stated rate of interest that was payable in cash on January 1 of each year beginning January 1, 2015. Based on this information alone, the amount of total liabilities appearing on the December 31, 2014 balance sheet would be:
A) $10,000.
B) $10,500.
C) $9,500.
D) $0.

Question

Quizplus · Accepted Answer

The Answer of Paul's Valley Company issued bonds with a $10,000 face value on January 1, 2014. The bonds were issued at face value and carried 5-year term to maturity. They had a 5% stated rate of interest that was payable in cash on January 1 of each year beginning January 1, 2015. Based on this information alone, the amount of total liabilities appearing on the December 31, 2014 balance sheet would be:
A) $10,000.
B) $10,500.
C) $9,500.
D) $0.

Paul's Valley Company Issued Bonds with a $10,000 Face Value