Question : 61.Ten-year bonds with a face value of $500,000 were issued : 1169140

 

 

61.Ten-year bonds with a face value of $500,000 were issued at 96. The carrying value of the bond after the second year of interest payments is:   

A. $484,000.

 

B. $480,000.

 

C. $500,000.

 

D. $482,000.

 

 

 

62.Bonds with a face value of $400,000 were issued at 98. The entry to record the issuance will include a debit to the Discount on Bonds Payable account for   

A. $2,000.

 

B. $4,000.

 

C. $6,000.

 

D. $8,000.

 

 

 

63.Bonds with a face value of $400,000 were issued at 98. The entry to record the issuance will include a debit to the Cash account for   

A. $408,000.

 

B. $400,000.

 

C. $398,000.

 

D. $392,000.

 

 

 

64.A company issued 10-year, 6% bonds with a par value of $1,000,000. The company received $1,120,000 upon issuance. Using the straight-line method, the amount of interest expense for the first semi-annual interest period is:   

A. $24,000.

 

B. $30,000.

 

C. $36,000.

 

D. $60,000.

 

 

 

65.A company issued 10-year, 6% bonds with a par value of $1,000,000. The company received $960,000 upon issuance. Using the straight-line method, the amount of interest expense for the first semi-annual interest period is:   

A. $24,000.

 

B. $30,000.

 

C. $32,000.

 

D. $60,000.

 

 

 

66.The entry to record the issuance of bonds at face value includes   

A. a credit to Bond Interest Payable.

 

B. a credit to Bond Payable.

 

C. a debit to Bond Interest Expense.

 

D. a debit to Bond Interest Payable.

 

 

 

 

67.Twenty-year bonds with a face value of $400,000 are issued on January 1 of the current year at 102. How much premium will be amortized under the straight-line method in the first semi-annual interest period?   

A. $200.

 

B. $400.

 

C. $800.

 

D. $8,000.

 

 

 

68.A bond sinking fund investment is started on January 5, 2016, by transferring $10,000 in cash to the fund. This $10,000 is invested and earns $1,100 during 2016. The entry to record the earnings made on the sinking fund investment includes   

A. a debit to Cash for $1,100 and a credit to Income from Sinking Fund Investment for $1,100.

 

B. a debit to Cash for $1,100 and a credit to Bond Sinking Fund Investment for $1,100.

 

C. a debit to Bond Sinking Fund Investment for $1,100 and a credit to Income from Sinking Fund Investment for $1,100.

 

D. a debit to Cash for $1,100 and a credit to Interest Income for $1,100.

 

 

 

 

69.A bond sinking fund investment is started on January 5, 2016, by transferring $12,000 in cash to the fund. The company intends to accumulate $12,000 each year in the fund. This $12,000 is invested and earns $1,500 during 2016. On January 5, 2017, the amount of cash transferred to the sinking fund investment will be   

A. $10,500.

 

B. $12,000.

 

C. $13,500.

 

D. $1,500.

 

 

 

70.The corporation must maintain a subsidiary ledger showing who owns the bonds and is entitled to receive interest payments if the bonds are   

A. coupon bonds.

 

B. registered bonds.

 

C. bearer bonds.

 

D. unregistered bonds.

 

 

 

 

 

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