Question : 71) ABC Corporation issued $600,000, 10%, 5-year bonds January 1, : 1230254

 

71) ABC Corporation issued $600,000, 10%, 5-year bonds on January 1, 2012 for $612,000 when the market interest rate was 8%. Interest is paid semiannually on January 1 and July 1. The corporation uses the effective-interest method to amortize bond premium. The amount of bond interest expense recognized on July 1, 2012 is:

A) $30,000.

B) $24,000.

C) $24,480.

D) $30,600.

72) Under the effective-interest method of amortization, the cash payment on each interest payment is calculated by multiplying the:

A) face value of the bonds times the effective-interest rate for the appropriate time period.

B) face value of the bonds times the stated interest rate for the appropriate time period.

C) carrying value of the bonds times the stated interest rate for the appropriate time period.

D) carrying value of the bonds times the effective-interest rate for the appropriate time period.

73) On January 1, Charlie Corporation issued $3,000,000, 14%, 5-year bonds with interest payable on January 1 and July 1. The bonds sold for $3,216,288. The market rate of interest for these bonds was 12%. Under the effective-interest method, the debit entry to interest expense on July 1 is for (rounded to the nearest dollar):

A) $180,000.

B) $188,237.

C) $192,978.

D) $210,000.

74) Under the effective-interest method, if bonds are issued at a discount the amount of interest expense:

A) increases each period as the bonds move towards maturity.

B) decreases each period as the bonds move towards maturity.

C) remains the same for each interest period.

D) equals the amount of cash paid for each interest period.

75) Using the straight-line amortization method, if bonds are sold at a discount:

A) interest expense in the beginning of the bond’s life will be less than interest expense at the end of the bond’s life.

B) interest expense in the beginning of the bond’s life will be more than interest expense at the end of the bond’s life.

C) unamortized discount is subtracted from the face value of the face value of the bond to determine its carrying value.

D) unamortized discount is added to the face value of the bond to determine its carrying value.

76) The total interest expense over the life of a bond is:

A) the sum of the interest payments plus the total discount.

B) the sum of the interest payments plus the total premium.

C) the sum of the interest payments less the total discount.

D) the sum of the interest payments.

77) On January 1, Hudson Corporation issues $500,000, 8%, 5-year bonds at 106. Assuming the straight-line amortization method is used and interest is paid annually, how much bond interest expense is recorded on the next interest date?

A) $6,000

B) $34,000

C) $46,000

D) $40,000

78) Ferndale Corporation issued a $20,000, 10-year, 10% bond dated January 1, at 102. The journal entry to record the issuance of the bond will include a:

A) debit to cash for $20,000.

B) debit to cash for $20,400.

C) credit to bonds payable for $20,400.

D) debit to discount on bonds payable for $400.

79) On January 1, 2012, ACT Corporation issued $800,000 of 6%, 5-year bonds at 98, with interest paid annually. Using the straight-line amortization method, what is the carrying value of the bonds on January 1, 2012?

A) $784,000

B) $785,600

C) $787,200

D) $790,400

80) On January 1, 2012, ACT Corporation issued $800,000 of 6%, 5-year bonds at 98, with interest paid annually. Using the straight-line amortization method, what is the carrying value of the bonds one year later on January 1, 2013?

A) $784,000

B) $785,600

C) $787,200

D) $790,400

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

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.

Money-back guarantee

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 more

Zero-plagiarism guarantee

Each 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 more

Free-revision policy

Thanks 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 more

Privacy policy

Your 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 more

Fair-cooperation guarantee

By 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