111.Refer to the information above. Interest expense on this bond issue reported in Cricket’s Year 1, income statement is:
A.$2,400,000.
B.$4,800,000.
C.$5,400,000.
D.$7,200,000.
$60,000,000 × 12% × 9/12 = $5,400,000
112.Refer to the information above. The adjustment necessary at December 31, Year 1 (if any), related to this bond issue involves:
A.Recognition of interest expense of $3,600,000.
B.Recognition of interest expense of $1,800,000.
C.Payment of cash of $1,800,000.
D.There is no adjustment necessary.
$60,000,000 × 12% × 3/12 = $1,800,000
113.Refer to the information above. With respect to this bond issue, Cricket Corporation’s balance sheet at December 31, Year 1, will include:
A.Bonds payable of $61,800,000.
B.Bonds payable of $63,600,000.
C.Bonds payable of $60 million, as well as interest payable of $1,800,000.
D.Bonds payable of $60 million, as well as interest payable of $3,600,000.
On April 1, Year 1, Greenway Corporation issues $20 million of 10%, 20-year bonds payable at par. Interest on the bonds is payable semiannually each April 1 and October 1.
114.Refer to the information above. The journal entry to record the first cash payment to bondholders on October 1, year 1, will include:
A.A credit to Cash of $2,000,000.
B.A debit to Bonds Payable of $1,000,000.
C.A debit to Interest Expense of $1,000,000.
D.A credit to Interest Payable of $1,000,000.
$20,000,000 × 10% × 6/12 = $1,000,000
115.Refer to the information above. The adjusting entry (if any) required on December 31, Year 1, related to this bond issue involves:
A.Recognition of interest expense of $1,000,000.
B.Recognition of interest expense of $500,000.
C.A credit to Interest Payable of $2,000,000.
D.A credit to Cash of $500,000.
$20,000,000 × 10% × 3/12 = $500,000
116.Refer to the information above. In Year 2, Greenway’s income statement will report interest expense arising from this bond issue of:
A.$1,000,000.
B.$2,000,000.
C.$500,000.
D.$1,500,000.
$20,000,000 × 10% = $2,000,000
117.Refer to the information above. On April 1, Year 1, the journal entry to record issuance of the bonds will include:
A.A credit to Interest Payable of $1,000,000.
B.A debit to Cash of $20,000,000.
C.A credit to Bonds Payable of $2,100,000.
D.A debit to Cash of $21,000,000.
118.Refer to the information above. With respect to this bond issue, Greenway’s balance sheet at December 31, Year 1, will include:
A.Bonds payable of $20,500,000.
B.Bonds payable of $19,500,000.
C.Bonds payable of $20 million, as well as interest payable of $1,500,000.
D.Bonds payable of $20 million, as well as interest payable of $500,000.
Austin Corporation issues $6,000,000 of 10%, 10-year bonds, dated December 31, Year 1. The bonds are issued on April 30, Year 2, at 100 plus accrued interest. Interest on the bonds is payable semiannually each June 30 and December 31.
119.Refer to the information above. The total amount of cash received by Austin Corporation upon issuance of the bonds on April 30, Year 2, is:
A.$6,000,000.
B.$6,200,000.
C.$6,150,000.
D.$6,300,000.
$6,000,000 + ($6,000,000 × 10% × 4/12) = $6,200,000
120.Refer to the information above. The entry to record the issuance of bonds payable on April 30, Year 2, includes:
A.A credit to Premium on Bonds Payable of $200,000.
B.A debit to Cash of $150,000.
C.A debit to Bond Interest Expense of $200,000.
D.A credit to Bond Interest Payable of $200,000.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more