Question : 125. Bonds Payable has a balance of $1,000,000 and Discount Bonds : 1226709

125. Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500.  If the issuing corporation redeems the bonds at 98.5, what is the amount of gain or loss on redemption? A. $500 lossB. $15,500 lossC. $15,500 gainD. $500 gain

126. Bonds Payable has a balance of $1,000,000 and Premium on Bonds Payable has a balance of $7,000.  If the issuing corporation redeems the bonds at 101, what is the amount of gain or loss on redemption? A. $3,000 lossB. $3,000 gainC. $7,000 lossD. $7,000 gain

127. When the bonds are sold for more than their face value, the carrying value of the bonds is equal to A. face valueB. face value plus the unamortized discountC. face value minus the unamortized premiumD. face value plus the unamortized premium

128. The balance in Discount on Bonds Payable  A. should be reported on the balance sheet as an asset because it has a debit balanceB. should be allocated to the remaining periods for the life of the bonds by the straight-line method, if the results obtained by that method materially differ from the results that would be obtained by the interest methodC. would be added to the related bonds payable to determine the carrying amount of the bondsD. would be subtracted from the related bonds payable on the balance sheet

129. The balance in Discount on Bonds Payable that is applicable to bonds due in 2015 would be reported on the balance sheet in the section entitled  A. current liabilitiesB. long-term liabilitiesC. current assetsD. intangible assets

130. The balance in Premium on Bonds Payable  A. should be reported on the balance sheet as a deduction from the related bonds payableB. should be allocated to the remaining periods for the life of the bonds by the straight-line method, if the results obtained by that method materially differ from the results that would be obtained by the interest methodC. would be added to the related bonds payable on the balance sheetD. should be reported in the paid-in capital section of the balance sheet

131. Debtors are interested in the times-interest-earned ratio because they want to  A. know what rate of interest the corporation is payingB. have adequate protection against a potential drop in earnings jeopardizing their interest paymentsC. be sure their debt is backed by collateralD. know the tax effect of lending to a corporation

132. Any unamortized premium should be reported on the balance sheet of the issuing corporation as  A. a direct deduction from the face amount of the bonds in the liability sectionB. as paid-in capitalC. a direct deduction from retained earningsD. an addition to the face amount of the bonds in the liability section

133. Numbers of times interest charges earned is computed as  A. Income before income taxes plus Interest Expense divided by Interest ExpenseB. Income before income taxes less Interest Expense divided by Interest ExpenseC. Income before income taxes divided by Interest ExpenseD. Income before income taxes plus Interest Expense divided by Interest Revenue

134. Balance sheet and income statement data indicate the following: 

Bonds payable, 8% (issued 1990, due 2015)

$1,200,000

Preferred 8% stock, $100 par

  (no change during the year)

200,000

Common stock, $50 par

  (no change during the year)

1,000,000

Income before income tax for year

320,000

Income tax for year

80,000

Common dividends paid

60,000

Preferred dividends paid

16,000

Based on the data presented above, what is the number of times bond interest charges were earned (round to two decimal places)? A. 5.67B. 4.33C. 3.24D. 3.50