Question : 91. On January 1, 2013, Jacob issues $800,000 of 9%, : 1256354

 

 

91. On January 1, 2013, Jacob issues $800,000 of 9%, 13-year bonds at a price of 96½. Six years later, on January 1, 2019, Jacob retires 20% of these bonds by buying them on the open market at 105½. All interest is accounted for and paid through December 31, 2018, the day before the purchase. The straight-line method is used to amortize any bond discount or premium.  What is the journal entry to record the issuance of the bonds on January 1, 2013? 

A.

Cash

800,000

 

Bonds Payable

 

800,000

B.

Bonds Payable

800,000

 

Cash

 

800,000

C.

Cash

800,000

 

Bonds Payable

 

772,000

Discount on Bonds Payable

 

28,000

D.

Cash

772,000

 

Premium on Bonds Payable

28,000

 

Bonds Payable

 

800,000

E.

Cash

772,000

 

Discount on Bonds Payable

28,000

 

Bonds Payable

 

800,000

 

 

92. On January 1, 2013, Jacob issues $800,000 of 9%, 13-year bonds at a price of 96½. Six years later, on January 1, 2019, Jacob retires 20% of these bonds by buying them on the open market at 105½. All interest is accounted for and paid through December 31, 2018, the day before the purchase. The straight-line method is used to amortize any bond discount or premium.  What is the journal entry to record the first semiannual interest payment on June 30, 2013? 

A.

Interest Expense

36,000

 

Cash

 

36,000

B.

Cash

36,000

 

Interest Expense

 

36,000

C.

Interest Expense

36,000

 

Discount on Bonds Payable

1,077

 

Cash

 

37,077

D.

Interest Expense

36,000

 

Premium on Bonds Payable

1,077

 

Cash

 

37,077

E.

Interest Expense

37,077

 

Discount on Bonds Payable

 

1,077

Cash

 

36,000

 

 

93. On January 1, 2013, Jacob issues $800,000 of 9%, 13-year bonds at a price of 96½. Six years later, on January 1, 2019, Jacob retires 20% of these bonds by buying them on the open market at 105½. All interest is accounted for and paid through December 31, 2018, the day before the purchase. The straight-line method is used to amortize any bond discount or premium.  What is the carrying value of the bond on January 1, 2019? 

A. $772,000 B. $831,076C. $784,924

D. $277,000E. $800,000

 

 

 

94. On January 1, 2013, Jacob issues $800,000 of 9%, 13-year bonds at a price of 96½. Six years later, on January 1, 2019, Jacob retires 20% of these bonds by buying them on the open market at 105½. All semiannual interest is accounted for and paid through December 31, 2018, the day before the purchase. The straight-line method is used to amortize any bond discount or premium.  What is the journal entry to record the retirement of 20% of the bonds on January 1, 2019? 

A.

Bonds Payable

160,000

 

Cash

 

156,985

Discount on Bonds Payable

 

3,015

B.

Bonds Payable

160,000

 

Loss on Retirement

11,815

 

Discount on Bonds Payable

 

3,015

Cash

 

168,800

C.

Bonds Payable

160,000

 

Discount on Bonds Payable

3,015

 

Cash

 

168,800

Gain on Retirement

 

5,785

D.

Bonds Payable

160,000

 

Premium on Bonds Payable

2,585

 

Discount on Bonds Payable

 

3,015

Cash

 

154,400

E.

Bonds Payable

168,800

 

Cash

 

168,800

 

 

95. On January 1, 2013, Jacob issues $600,000 of 11%, 15-year bonds at a price of 102½. What is the journal entry to record the issuance of these bonds? 

A.

Cash

600,000

 

Bonds Payable

 

600,000

B.

Bonds Payable

600,000

 

Cash

 

600,000

C.

Cash

615,000

 

Bonds Payable

 

600,000

Premium on Bonds Payable

 

15,000

D.

Cash

600,000

 

Premium on Bonds Payable

15,000

 

Bonds Payable

 

615,000

E.

Cash

600,000

 

Discount on Bonds Payable

9,000

 

Bonds Payable

 

609,000

 

 

 

96. On January 1, 2013, Jacob issues $600,000 of 11%, 15-year bonds at a price of 102½. The straight-line method is used to amortize any bond discount or premium.  What is the journal entry to record the first interest semi-annual interest payment on June 30, 2013?A.

Interest Expense

33,000

 

Cash

 

33,000

B.

Cash

33,000

 

Interest Expense

 

33,000

C.

Interest Expense

32,500

 

Discount on Bonds Payable

500

 

Cash

 

33,000

D.

Interest Expense

32,500

 

Premium on Bonds Payable

500

 

Cash

 

33,000

E.

Interest Expense

33,000

 

Discount on Bonds Payable

 

500

Cash

 

32,500

 

 

97. On January 1, 2013, Jacob issues $600,000 of 11%, 15-year bonds at a price of 102½. The straight-line method is used to amortize any bond premium or discount.  What is the total interest expense for the life of these bonds? 

A. $975,000 B. $964,000C. $936,000

D. $772,000E. $990,000

 

 

 

98. On January 1, 2013, Jacob issued $600,000 of 11%, 15-year bonds at a price of 102½. The straight-line method is used to amortize any bond discount or premium and interest is paid semiannually. If all interest has been accounted for properly, what is the carrying value of these bonds on January 1, 2019?  

A. $472,000 B. $531,076C. $584,924

D. $609,000E. $600,000

 

 

 

99. On January 1, 2013, Jacob issued $600,000 of 11%, 15-year bonds at a price of 102½. The straight-line method is used to amortize any bond discount or premium and interest is paid semiannually. All interest has been accounted for (and paid) through December 31, 2018. The company retires 30% of these bonds by buying them on the open market at 98½.What is the journal entry to record the retirement of 30% of the bonds on January 1, 2019? 

A.

Bonds Payable

180,000

 

Cash

 

177,300

Discount on Bonds Payable

 

2,700

B.

Bonds Payable

180,000

 

Loss on Retirement

11,815

 

Discount on Bonds Payable

 

2,700

Cash

 

177,300

C.

Bonds Payable

180,000

 

Discount on Bonds Payable

2,700

 

Gain on Retirement

 

177,300

Cash

 

5,400

D.

Bonds Payable

180,000

 

Premium on Bonds Payable

2,700

 

Gain on Retirement

 

5,400

Cash

 

177,300

E.

Bonds Payable

180,000

 

Cash

 

180,000

 

 

 

 

100. On April 1, 2013, Jared Enterprises issues bonds dated January 1, 2013, that have a $2,430,000 par value, mature in 20 years, and pay 7% interest semiannually on June 30 and December 31. The bonds are sold at par plus three months’ accrued interest. What is the total amount of cash Jared Enterprises will collect on April 1, 2013?

A. $2,600,100B. $2,430,000C. $2,472,525

D. $2,750,000E. $2,515,050

 

 

 

 

101. On January 1, 2013, Lane issues $700,000 of 7%, 15-year bonds at a price of 106 3/4. The interest payments are made on June 30 and December 31. The straight-line method is used to amortize any bond discount or premium. Lane elects a fiscal year ending September 30. What is the appropriate adjusting journal entry required for September 30, 2013?

A.

Interest Expense

22,925

 

Cash

 

22,925

B.

Interest Expense

22,925

 

Premium on Bonds Payable

1,575

 

Cash

 

24,500

C.

Interest Expense

11,462.50

 

Premium on Bonds Payable

787.50

 

Interest Payable

 

12,250

D.

Interest Payable

11,462.50

 

Premium on Bonds Payable

787.50

 

Cash

 

12,250

E.

Interest Payable

11,462.50

 

Discount on Bond Payable

787.50

 

Interest Expense

 

12,250

 

 

 

102. On January 1, 2013, Lane issues $700,000 of 7%, 15-year bonds at a price of 106¾. The interest payments are made on June 30 and December 31. Lane elects a fiscal year ending September 30. What is the amount that would be recorded as interest expense in the December 31, 2013, journal entry?

A. $24,500.00

B. $22,925.00C. $12,250.50

D. $11,462.50E. $13,458.00

 

 

 

103. On January 1, 2013, Lane issues $700,000 of 7%, 15-year bonds at a price of 106¾. The interest payments are made on June 30 and December 31. Lane elects a fiscal year ending September 30. What is the amount that would be recorded as cash paid in the December 31, 2013, journal entry?

A. $24,500

B. $22,925C. $12,250

D. $11,462E. $13,458