Question :
147.Knollwood Corporation issued $296,000 of 30-year, 8 percent bonds at : 1244134
147.Knollwood Corporation issued $296,000 of 30-year, 8 percent bonds at 106 on one of its semiannual interest payment dates. The straight-line method of amortization is to be used. How much bond interest expense will be recorded on the next interest payment date?
a.
$11,840
b.
$11,240
c.
$11,544
d.
$12,136
148.Knollwood Corporation issued $300,000 of 30-year, 8 percent bonds at 106 on one of its semiannual interest payment dates. The straight-line method of amortization is to be used. What is the total interest cost of the bonds?
a.
$738,000
b.
$719,500
c.
$702,000
d.
$720,000
149.Knollwood Corporation issued $283,000 of 30-year, 8 percent bonds at 106 on one of its semiannual interest payment dates. The straight-line method of amortization is to be used. After 11 years, what is the carrying value of the bonds?
a.
$292,056
b.
$290,075
c.
$291,490
d.
$293,754
150.The effective interest method of amortization of bond premiums and discounts is superior to the straight-line method because it results in a(n)
a.
uniform rate of interest.
b.
interest rate that is close to the market interest rate.
c.
interest rate that increases or decreases slightly over time.
d.
more variable interest rate.
151.A company issued $300,000 of 20-year, 8 percent bonds at 96. If interest is paid semiannually, what is the amount of bond interest expense recorded (assuming the straight-line method of amortization) on any interest date?
a.
$23,700
b.
$24,300
c.
$12,300
d.
$12,000
152.A ten-year bond has a face value of $10,000, a face interest rate of 11 percent, an unamortized bond premium of $400, and an effective interest rate of 10 percent. In the first semiannual interest payment period (assuming the effective interest method of amortization), the amount of premium amortization will be
a.
$60.00.
b.
$30.00.
c.
$72.00.
d.
$144.00.
153.In 20×4, Horwitz Corporation issued 10-year, 9 percent bonds when the market interest rate was 11 percent. Interest is payable annually. During 20×7, the market rate of interest for similar bonds was 12 percent. Using the effective interest method of amortization, what interest rate will be used to calculate interest expense for 20×7?
a.
12 percent
b.
6 percent
c.
11 percent
d.
9 percent
154.Lassen Corporation issued 10-year term bonds on January 1, 20×7, with a face value of $800,000. The face interest rate is 6 percent and interest is payable semiannually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual interest rate of 8 percent. The effective interest method of amortization is to be used. What amount of discount should be amortized for the first six-month interest period? (Round answer to the nearest dollar.)
a.
$5,452
b.
$7,277
c.
$11,271
d.
$3,638
155.Lassen Corporation issued 10-year term bonds on January 1, 20×7, with a face value of $800,000. The face interest rate is 6 percent and interest is payable semiannually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual interest rate of 8 percent. The effective interest method of amortization is to be used. The entry on June 30, 20×7, to record the payment of interest and amortization of discount will include a
a.
debit to Bond Interest Expense for $24,000.
b.
credit to Cash for $27,638.
c.
credit to Unamortized Bond Discount for $3,638.
d.
debit to Bond Interest Expense for $32,000.
156.Lassen Corporation issued 10-year term bonds on January 1, 20×7, with a face value of $800,000. The face interest rate is 6 percent and interest is payable semiannually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual interest rate of 8 percent. The effective interest method of amortization is to be used. How much bond interest expense (rounded to the nearest dollar) should be reported on the income statement for the year ended December 31, 20×7?
a.
$55,277
b.
$55,422
c.
$55,131
d.
$48,000
