Stafford co. issued $200,000 face value, 6%, 10-year bonds on january 1, 2017 for $172,740. the market rate of interest was 8%. interest is payable semi-annually on june 30 and december 31. staffer uses the effective interest method to amortize bond premium or discount.
a) determine the amount of interest expense to be recorded with the first cash interest payment.
(b) determine the carrying value of the bonds on december 31, 2017, after the interest payment has been made.
c) how much interest expense would be recorded on the 2017 income statement?
(d) if the bonds are selling at 103 on december 31, 2018, have market interest rates increased or decreased since the bonds were issued?

answer; /// i do believe the correct answer is (possession utility);

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.