Reference no: EM132486072

Question 1: When a bond issue sale price is lower than the bond face amount, the effective interest rate?Choose the best answer on the following choices:

Option 1: Higher than the stated rate

Option 2: Lower than the stated rate

Option 3: Equal to the stated rate

Option 4: Effective interest is not applicable to bonds

Question 2: Vitale Sweets Inc. is a defendant in a current lawsuit that it estimates has probable loss of $165,000. What should be done to the loss contingency?Choose the best answer on the following choices:

Option 1: Disclosed and accrued as a liability

Option 2: Disclosed but not accrued as liability

Option3: Not Disclosed, but accrued as a liability

Option 4: Not Disclosed and not accrued as a liability