Question : 51. On January 1, 2010, Tonika Corporation issued a four-year, $10,000, : 1228434

 

51. On January 1, 2010, Tonika Corporation issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,668 based on an 8% effective interest rate. Assuming effective-interest amortization is used, how much is the interest expense on the income statement for the year ended December 31, 2010 (to the nearest dollar)? 
A. $677
B. $883
C. $773
D. $700

2010 interest expense ($773) = Initial issue price, which is the 1/1/2010 book value ($9,668) ? Market (effective) interest rate (.08).

52. On January 1, 2010, Tonika Corporation issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,668 based on an 8% effective interest rate. Assuming effective-interest amortization is used, which of the following journal entries correctly records the 2010 interest expense (to the nearest dollar)? 
A. 
B. 
C. 
D. 

2010 interest expense ($773) = Initial issue price, which is the 1/1/2010 book value ($9,668) ? Market (effective) interest rate (.08).
Cash interest payment ($700) = Maturity value of the bond ($10,000) ? Stated interest rate (.07)
Discount on bonds payable amortization ($73) = Interest expense ($773) – Interest cash payment ($700).

53. On January 1, 2010, Tonika Corporation issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,668 based on an 8% effective interest rate. Assuming effective-interest amortization is used, what is the book value of the bonds as of December 31, 2010 (to the nearest dollar)? 
A. $8,968
B. $9,945
C. $9,641
D. $9,741

2010 interest expense ($773) = Initial issue price, which is the 1/1/2010 book value ($9,668) ? Market (effective) interest rate (.08).
Cash interest payment ($700) = Maturity value of the bond ($10,000) ? Stated interest rate (.07)
Discount on bonds payable amortization ($73) = Interest expense ($773) – Interest cash payment ($700).
December 31, 2010 book value ($9,741) = January 1, 2010 book value ($9,668) + Discount on bonds payable amortization ($73).

54. On January 1, 2010, Tonika Corporation issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,668 based on an 8% effective interest rate. Assuming effective-interest amortization is used, what is the 2011 interest expense (to the nearest dollar)? 
A. $779
B. $796
C. $677
D. $700

2010 interest expense ($773) = Initial issue price, which is the 1/1/2010 book value ($9,668) ? Market (effective) interest rate (.08).
Cash interest payment ($700) = Maturity value of the bond ($10,000) ? Stated interest rate (.07)
Discount on bonds payable amortization ($73) = Interest expense ($773) – Interest cash payment ($700).
December 31, 2010 book value ($9,741) = January 1, 2010 book value ($9,668) + Discount on bonds payable amortization ($73).
2011 interest expense ($779) = 12/31/2010 book value ($9,741) ? Market (effective) interest rate (.08).

55. On January 1, 2010, Tonika Corporation issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,668 based on an 8% effective interest rate. Assuming effective-interest amortization is used, what is the December 31, 2011 book value after the December 31, 2011 interest payment was made (to the nearest dollar)? 
A. $9,662
B. $9,820
C. $9,668
D. $9,723

2010 interest expense ($773) = Initial issue price, which is the 1/1/2010 book value ($9,668) ? Market (effective) interest rate (.08).
Cash interest payment ($700) = Maturity value of the bond ($10,000) ? Stated interest rate (.07)
Discount on bonds payable amortization ($73) = Interest expense ($773) – Interest cash payment ($700).

56. On January 1, 2010, Broker Corp. issued $3,000,000 par value 12%, 10 year bonds which pay interest each December 31. If the market rate of interest was 14%, what was the issue price of the bonds? (The present value factor for $1 in 10 periods at 12% is .3220 and at 14% is .2697. The present value of an annuity of $1 factor for 10 periods at 12% is 5.6502 and at 14% is 5.2161.) 
A. $3,339,084
B. $2,843,172
C. $3,000,000
D. $2,686,896

57. On January 1, 2009, Jason Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid annually. The following present value factors have been provided:
  
What was the issuance price of the bonds if the market rate of interest was 8%? 
A. $5,000,000
B. $5,670,000
C. $5,387,500
D. $5,712,500

58. On January 1, 2009, Jason Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid annually. The following present value factors have been provided:
  
Calculate the issuance price if the market rate of interest is 12%. 
A. $4,427,500
B. $4,477,500
C. $4,435,000
D. $5,000,000

59. On January 1, 2009, Jason Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid annually. The following present value factors have been provided:
  
Calculate the issuance price if the market rate of interest was 10%. 
A. $5,427,000
B. $4,477,000
C. $4,435,000
D. $5,000,000

60. Gammell Company issued $50,000 of 9% bonds with annual interest payments. The bonds mature in ten years. The bonds were issued at $48,000. Gammel Company uses the straight-line method of amortization. How much is the annual interest expense? 
A. $4,700
B. $4,300
C. $4,500
D. $4,680

 

 

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