1. <\/b> A $600,000 bond was retired at 98 when the carrying value of the bond was $592,000. The entry to record the retirement would include a (Points : 2) gain on bond redemption of $8,000.<\/p>\n
loss on bond redemption of $8,000.<\/p>\n
loss on bond redemption of $4,000.<\/p>\n
gain on bond redemption of $4,000.<\/p>\n
Question 2.
\n2. <\/b> Bond interest paid is (Points : 2) higher when bonds sell at a discount.<\/p>\n
lower when bonds sell at a premium.<\/p>\n
the same whether bonds sell at a discount or a premium.<\/p>\n
higher when bonds sell at a discount and lower when bonds sell at a premium.<\/p>\n
Question 3.
\n3. <\/b> A bond with a face value of $200,000 and a quoted price of 102\u00bc has a selling price of (Points : 2) $240,450.<\/p>\n
$204,050.<\/p>\n
$200,450.<\/p>\n
$204,500.<\/p>\n
Question 4.
\n4. <\/b> Lake Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2011. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Lake uses the straight-line method of amortization.<\/p>\n
What is the amount of interest Lake must pay the bondholders in 2011? (Points : 2)<\/p>\n
$15,080<\/p>\n
$16,000<\/p>\n
$17,150<\/p>\n
$14,850<\/p>\n
Question 5.
\n5. <\/b> Jarmin Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2011. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Jarmin uses the straight-line method of amortization.<\/p>\n
What is the carrying value of the bonds on January 1, 2013? (Points : 2)<\/p>\n
$200,000<\/p>\n
$190,800<\/p>\n
$197,700<\/p>\n
$189,650<\/p>\n
Question 6.
\n6. <\/b> A $600,000 bond was retired at 103 when the carrying value of the bond was $622,000. The entry to record the retirement would include a (Points : 2) gain on bond redemption of $18,000.<\/p>\n
loss on bond redemption of $12,000.<\/p>\n
loss on bond redemption of $18,000.<\/p>\n
gain on bond redemption of $4,000.<\/p>\n
Question 7.
\n7. <\/b> If bonds with a face value of $150,000 are converted into common stock when the carrying value of the bonds is $135,000, the entry to record the conversion will include a debit to (Points : 2) Bonds Payable for $150,000.<\/p>\n
Bonds Payable for $135,000.<\/p>\n
Discount on Bonds Payable for $15,000.<\/p>\n
Bonds Payable equal to the market price of the bonds on the date of conversion.<\/p>\n
Question 8.
\n8. <\/b> A bond trustee does not (Points : 2) issue the bonds.<\/p>\n
keep a record of each bondholder.<\/p>\n
hold conditional title to pledged property.<\/p>\n
maintain custody of unsold bonds.<\/p>\n
Question 9.
\n9. <\/b> Lark Corporation retires its $800,000 face value bonds at 105 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $829,960. The entry to record the redemption will include a (Points : 2) credit of $10,040 to Loss on Bond Redemption.<\/p>\n
debit of $10,040 to Loss on Bond Redemption.<\/p>\n
credit of $10,040 to Premium on Bonds Payable.<\/p>\n
debit of $40,000 to Premium on Bonds Payable.<\/p>\n
Question 10.
\n10. <\/b> Hernandez Corporation issues 3,000, 10-year, 8%, $1,000 bonds dated January 1, 2012, at 98. The journal entry to record the issuance will show a (Points : 2) debit to Cash of $3,000,000.<\/p>\n
credit to Discount on Bonds Payable for $60,000.<\/p>\n
credit to Bonds Payable for $3,040,000.<\/p>\n
debit to Cash for $2,960,000.<\/p>\n","protected":false},"excerpt":{"rendered":"
1. A $600,000 bond was retired at 98 when the carrying value of the bond was $592,000. The entry to record the retirement would include a (Points : 2) gain on bond redemption of $8,000. loss on bond redemption of Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-50209","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/50209","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=50209"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/50209\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=50209"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=50209"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=50209"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}