75. When the face rate of interest is lower than the market rate of interest on the date bonds are issued:
A)the proceeds from the issuance of the bonds are greater than the face value of the bonds
B)the bonds are issued at a premium
C)the bonds are issued at a discount
D)both a and b are correct
76. The journal entry to record the interest expense of a bond payable issued at a premium would include a:
A)debit to Cash
B)credit to Bonds Payable
C)credit to Interest Expense
D)debit to Premium on Bonds Payable
77. Bonds are issued at a premium when the:
A)proceeds from the issuance of the bonds are greater than the face value of the bonds
B)market rate of interest is lower than the face rate of interest on the bonds
C)face rate of interest on the bonds is equal to the market rate of interest
D)both a and b are correct
78. The amortization of a premium on bonds payable:
A)increases the carrying value of the bonds
B)increases the amount of interest expense recorded for the bonds
C)decreases the amount of interest expense recorded for the bonds
D)has no effect on the amount of interest expense recorded for the bonds
79. The amortization of a premium on bonds payable:
A)decreases the carrying value of the bonds
B)increases the amount of interest expense recorded for the bonds
C)decreases the amount of cash paid at the interest date
D)has no effect on the amount of interest expense recorded for the bonds
80. On the maturity date of bonds issued at a premium:
A)the Premium on Bonds Payable account is zero
B)the carrying value of the bonds is greater than face value
C)the carrying value of the bonds is less than face value
D)both a and b are correct
81. The amortization of a premium on bonds payable:
A)has no effect on the cash payments for interest reported in the operating activities section of the statement of cash flows
B)increases the cash payments for interest reported in the operating activities section of the statement of cash flows
C)decreases the cash payments for interest reported in the operating activities section of the statement of cash flows
D)is reported in the financing activities section of the statement of cash flows
82. How does the amortization of discounts and premiums affect the carrying value of bonds?
Discount Premium
A)Increase Increase
B)Decrease Increase
C)Increase Decrease
D)Decrease Decrease
83. How does the amount of premium and discount amortized in each period change over the term of bonds?
Discount Premium
A)Increase Increase
B)Decrease Increase
C)Increase Decrease
D)Decrease Decrease
84. Bonds payable have a face amount of $1,000,000 and a discount of $10,000. The face interest rate is 9 percent and the effective interest rate is 10 percent. If the annual interest payment is due today, what amount of interest expense should be recorded?
A)$100,000
B)$ 99,000
C)$ 90,000
D)$ 89,100
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