Assuming that a bond is originally issued at a discount, the carrying value of the bond...
Assuming that a bond is originally issued at a discount, the carrying value of the bond liability will decrease over the life of the bond. This statement is
True or False
Homework Answers
Answer- FALSE- If a bond is originally issued at a discount, the carrying value of the bond liability will decrease over the life of the bond.
Explanation- If a bond issued at a discount, the carrying/book value of bond liability will increase over the life of the bond.
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Assuming that a bond is originally issued at a discount, the
carrying value of the bond...
1. Assuming that a bond is originally issued at a premium, the carrying value of the bond liability will decrease over t...
1. Assuming that a bond is originally issued at a premium, the carrying value of the bond liability will decrease over the life of the bond. This statement is True or False 2.On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 resulting in a 4% discount. They had a 20 year term and a stated rate of interest of 7%. Based on this information, the carrying value of the...
The carrying value of a bond is computed as the face value minus any unamortized discount...
The carrying value of a bond is computed as the face value minus any unamortized discount or plus any unamortized premium. 17 True or False points ( 8 01:48:33 True False
QUESTION 21 If bonds were initially issued at a discount, the carrying value of the bonds...
QUESTION 21 If bonds were initially issued at a discount, the carrying value of the bonds on the issuer's books will 1. decrease as the bonds approach their maturity date 2. fluctuate throughout the bonds' life 3. increase as the bonds approach their maturity date 4. remain constant throughout the bonds' life QUESTION 22 Cash flows from issuing and repurchasing stock or issuing and repaying debt are classified as 1. financing activities. 2. borrowing activities. 3. investing activities. 4. operating...
A 5-year term bond was issued on January 1, Year 1. at a discount. The carrying...
A 5-year term bond was issued on January 1, Year 1. at a discount. The carrying amount of the bond at December 31, Year 2. will be The same as the carrying amount at January 1 Year 10 Higher than the carrying amount at December a year Lower than the carrying amount at December 31, Year Higher than the carrying amount at December 31. Year 1
Diaz Company issued $84,000 face value of bonds on January 1, 2018. The bonds had a...
Diaz Company issued $84,000 face value of bonds on January 1, 2018. The bonds had a 8 percent stated rate of interest and a ten-year term. Interest is paid in cash annually, beginning December 31, 2018. The bonds were issued at 98. The straight-line method is used for amortization. Required Use a financial statements model like the one shown below to demonstrate how (1) the January 1, 2018, bond issue and (2) the December 31, 2018, recognition of interest expense,...
A bond issued at a discount typically has a market price that decreases toward maturity value....
A bond issued at a discount typically has a market price that decreases toward maturity value. O 0 True False Which type of lease will not increase a company's assets or liabilities? O A. a lease in which title is transferred to the lessee at the end of the lease term OB. a finance lease O c. an operating lease OD. the present value of lease payments is 90% or more of the market value of the leased asset Under...
Diaz Company issued $122,000 face value of bonds on January 1, 2018. The bonds had a...
Diaz Company issued $122,000 face value of bonds on January 1, 2018. The bonds had a 5 percent stated rate of interest and a ten-year term. Interest is paid in cash annually, beginning December 31, 2018. The bonds were issued at 99. The straight-line method is used for authorization. Determine the carrying value (face value less discount or plus premium) of the bond liability as of December 31, 2018. Determine the amount of interest expense reported on the 2018 income...
Amortization of Discount Stacy Company issued five-year, 10% bonds with a face value of $10,000 on...
Amortization of Discount
Stacy Company issued five-year, 10% bonds with a face value of
$10,000 on January 1, 2017. Interest is paid annually on December
31. The market rate of interest on this date is 12%, and Stacy
Company receives proceeds of $9,279 on the bond issuance.
Required:
Refer to the tables above for present value factors.
1. Prepare a five-year table to amortize the
discount using the effective interest method.
Note: Round the 12/31/18 interest expense and discount amortized...
E10-18 LOTO Recording the Early Retirement of a Bond Issued at a Discount (with Discount Account)...
E10-18 LOTO Recording the Early Retirement of a Bond Issued at a Discount (with Discount Account) Several years ago, Nicole Company issued bonds with a face value of $1.000.000 for $945.000. As a result of declining interest rates, the company has decided to call the bond at a call premium of 5 percent over par. The bonds have a current book value of $984,000. Record the retirement of the bonds, using a dis count account
Exercise 10-17A Straight-line amortization of a bond premium LO 10-5 Stuart Company issued bonds with a...
Exercise 10-17A Straight-line amortization of a bond premium LO 10-5 Stuart Company issued bonds with a $150,000 face value on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a five-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 103. The straight-line method is used for amortization. Required a. Use a financial statements model like the one shown next to demonstrate how (1) the January...
The carrying value of a bond is computed as the face value minus any unamortized discount or plus any unamortized premium. 17 True or False points ( 8 01:48:33 True False
QUESTION 21 If bonds were initially issued at a discount, the carrying value of the bonds on the issuer's books will 1. decrease as the bonds approach their maturity date 2. fluctuate throughout the bonds' life 3. increase as the bonds approach their maturity date 4. remain constant throughout the bonds' life QUESTION 22 Cash flows from issuing and repurchasing stock or issuing and repaying debt are classified as 1. financing activities. 2. borrowing activities. 3. investing activities. 4. operating...
A 5-year term bond was issued on January 1, Year 1. at a discount. The carrying amount of the bond at December 31, Year 2. will be The same as the carrying amount at January 1 Year 10 Higher than the carrying amount at December a year Lower than the carrying amount at December 31, Year Higher than the carrying amount at December 31. Year 1
A bond issued at a discount typically has a market price that decreases toward maturity value. O 0 True False Which type of lease will not increase a company's assets or liabilities? O A. a lease in which title is transferred to the lessee at the end of the lease term OB. a finance lease O c. an operating lease OD. the present value of lease payments is 90% or more of the market value of the leased asset Under...
Amortization of Discount
Stacy Company issued five-year, 10% bonds with a face value of
$10,000 on January 1, 2017. Interest is paid annually on December
31. The market rate of interest on this date is 12%, and Stacy
Company receives proceeds of $9,279 on the bond issuance.
Required:
Refer to the tables above for present value factors.
1. Prepare a five-year table to amortize the
discount using the effective interest method.
Note: Round the 12/31/18 interest expense and discount amortized...
E10-18 LOTO Recording the Early Retirement of a Bond Issued at a Discount (with Discount Account) Several years ago, Nicole Company issued bonds with a face value of $1.000.000 for $945.000. As a result of declining interest rates, the company has decided to call the bond at a call premium of 5 percent over par. The bonds have a current book value of $984,000. Record the retirement of the bonds, using a dis count account
Exercise 10-17A Straight-line amortization of a bond premium LO 10-5 Stuart Company issued bonds with a $150,000 face value on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a five-year term. Interest is paid in cash annually, beginning December 31, Year 1. The bonds were issued at 103. The straight-line method is used for amortization. Required a. Use a financial statements model like the one shown next to demonstrate how (1) the January...
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