Question :
61. Tyson Construction Inc.Use the information provided for Tyson Construction Inc. : 1224956
61. Tyson Construction Inc.
Use the information provided for Tyson Construction Inc. to answer the following question(s) using the effective interest method.
On January 2, 2012, Tyson Construction Inc. issued $1,000,000, 10-year bonds for $1,135,915. The bonds pay interest on June 30 and December 31. The stated rate is 10% and the market rate is 8%.
Refer to the information provided for Tyson Construction Inc. What is the carrying value of the bonds after the first interest payment is made on June 30, 2012?
A. $1,135,915.00
B. $1,131,351.60
C. $1,140,478.40
D. $1,000,000.00
62. Tyson Construction Inc.
Use the information provided for Tyson Construction Inc. to answer the following question(s) using the effective interest method.
On January 2, 2012, Tyson Construction Inc. issued $1,000,000, 10-year bonds for $1,135,915. The bonds pay interest on June 30 and December 31. The stated rate is 10% and the market rate is 8%.
Refer to the information provided for Tyson Construction Inc. What is the carrying value of the bonds at the end of ten years before the final maturity payment is made?
A. $ 850,000
B. $1,200,000
C. $1,000,000
D. $1,150,000
63. Tyson Construction Inc.
Use the information provided for Tyson Construction Inc. to answer the following question(s) using the effective interest method.
On January 2, 2012, Tyson Construction Inc. issued $1,000,000, 10-year bonds for $1,135,915. The bonds pay interest on June 30 and December 31. The stated rate is 10% and the market rate is 8%.
Refer to the information provided for Tyson Construction Inc. What amount besides the interest payment would Tyson repay its bondholders on the maturity date?
A. $ 850,000
B. $1,150,000
C. $1,000,000
D. only the last interest payment
64. Flounder Inc.
Use the information provided for Flounder Inc. to answer the question(s) using the effective interest method.
On January 1, 2012, Flounder Inc. issued $800,000, 10-year, 9% bonds for $662,356. The bonds pay interest on June 30 and December 31. The market rate is 12%.
Refer to the information provided for Flounder Inc. The interest expense on the bonds at June 30, 2012, is:
A. $79,482.77.
B. $36,000.00.
C. $39,741.38.
D. $29,806.04.
65. Flounder Inc.
Use the information provided for Flounder Inc. to answer the question(s) using the effective interest method.
On January 1, 2012, Flounder Inc. issued $800,000, 10-year, 9% bonds for $662,356. The bonds pay interest on June 30 and December 31. The market rate is 12%.
Refer to the information provided for Flounder Inc. The interest payment on June 30, 2012, is:
A. $30,000
B. $32,237
C. $31,740
D. $36,000
66. Flounder Inc.
Use the information provided for Flounder Inc. to answer the question(s) using the effective interest method.
On January 1, 2012, Flounder Inc. issued $800,000, 10-year, 9% bonds for $662,356. The bonds pay interest on June 30 and December 31. The market rate is 12%.
Refer to the information provided for Flounder Inc. What is the carrying value of the bonds after the first interest payment is made on June 30, 2012?
A. $662,356.40
B. $666,097.78
C. $670,063.65
D. $133,902.22
67. Flounder Inc.
Use the information provided for Flounder Inc. to answer the question(s) using the effective interest method.
On January 1, 2012, Flounder Inc. issued $800,000, 10-year, 9% bonds for $662,356. The bonds pay interest on June 30 and December 31. The market rate is 12%.
Refer to the information provided for Flounder Inc. What is the carrying value of the bonds at the end of the ten years before the final maturity payment is made?
A. $800,000
B. $662,356
C. $137,643
D. $0
68. With the effective interest method of amortization, the amortization of a bond discount results in a(n):
A. increase in stockholders’ equity.
B. decrease in liabilities.
C. increase in interest expense.
D. decrease in interest expense.
69. With the effective interest method of amortization, the amortization of a bond premium results in a(n)
A. increase in liabilities.
B. decrease of stockholders’ equity.
C. increase in interest expense.
D. decrease in interest expense.
70. On January 2, 2012, Golden Corporation sold $800,000 of bonds for $785,000. The bonds will mature in 10 years and pay interest annually on December 31. Golden properly recorded the payment of interest and amortization of the discount using the effective interest method. Which of the following statements is true about the carrying value of the bonds and/or the unamortized discount at the end of 2012?
A. The carrying value will be less than $785,000.
B. The carrying value will be $785,000.
C. The carrying value will be greater than $785,000.
D. The unamortized premium will be more than $15,000.
71. Creative Products Company
The following question(s) are based on items that might appear on the balance sheet of a company like the Creative Products Company. Identify how each item would be most likely classified on its balance sheet.
Refer to the information provided for Creative Products Company. Premium on Bonds Payable will appear as:
A. an addition to a long-term liability.
B. a revenue.
C. a long-term asset.
D. a contra-liability.
72. Creative Products Company
The following question(s) are based on items that might appear on the balance sheet of a company like the Creative Products Company. Identify how each item would be most likely classified on its balance sheet.
Refer to the information provided for Creative Products Company. Current portion of long-term debt will appear as a:
A. current liability.
B. long-term liability.
C. current asset.
D. long-term asset.