1, The interest expense recorded on an interest payment date is greater than the cash interest...
1, The interest expense recorded on an interest payment date is greater than the cash interest paid
Group of answer choices
A. only if the company is amortizing a discount on bonds payable.
B. only if the company is amortizing a premium on bonds payable.
Homework Answers
The interest expense recorded on an interest payment date is greater than the cash interest paid only if the company is amortizing a discount on bonds payable. The interest on bond is recorded by two methods one is straight line method and other is effective interest rate method. The effective interest rate method method where the interest expenses is recorded greater than the cash interest paid.Therefore, the interest expenses is debited and amortized discount on bonds payable is credited.
So correct answer is option (A) or only if the company is amortizing a discount on bonds payable.
The interest expense recorded on an interest payment date is greater than the cash interest paid only if the company is amortizing a discount on bonds payable. The interest on bond is recorded by two methods one is straight line method and other is effective interest rate method. The effective interest rate method method where the interest expenses is recorded greater than the cash interest paid.Therefore, the interest expenses is debited and amortized discount on bonds payable is credited.
So correct answer is option (A) or only if the company is amortizing a discount on bonds payable.
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1, The interest expense recorded on an interest payment date is
greater than the cash interest...
QUESTION 46 The interest expense recorded on an interest payment date is increased A. by the...
QUESTION 46 The interest expense recorded on an interest payment date is increased A. by the amortization of discount on bonds payable. B. by the amortization of premium on bonds payable. C. only if the bonds were sold at face value. D.only if the market rate of interest is less than the stated rate of interest on that date. QUESTION 47 Spice Company reported net income of $90,000 for the year. During the year, accounts receivable increased by $6,000, accounts...
How does a company account for the difference between interest expense and the cash payment of interest when bond...
How does a company account for the difference between interest expense and the cash payment of interest when bonds are issued at less than their face value? O A. The difference is accounted for using Bonds Payable OB. The difference is accounted for using Amortization of Bond Discount OC. The difference is accounted for using Amortization of Bond Premium. O D. In this situation the cash payment of interest will exceed interest expense The carrying amount of bonds issued at...
9) Under the effective-interest method of amortization, the cash payment on each interest pas date will:...
9) Under the effective-interest method of amortization, the cash payment on each interest pas date will: A) remain the same for each interest period B) decrease if bonds are issued at a premium C) increase if bonds are issued at par D) increase if bonds are issued at a discount 10) Current liabilities fall into two categories, which are referred to as: A) contra liabilities and contingent liabilities B) contingent liabilities and non contingent liabilities C) liabilities of a known...
n stock is issued for an amount greater than par value 8. should be credited to...
n stock is issued for an amount greater than par value 8. should be credited to a. Retained Earnings b. Cash c. Legal Capital d. Paid-in Capital in Excess of Par e. Unrealized Holding Gains and Losses-Equity to record the amortization of a premium on bonds payable is a. Premium on Bonds Payable b. Interest Expense c. Interest Expense d. Bonds Payable e. Premium on Bonds Payable Interest Expense Premium on Bonds Payable Cash Interest Expense Interest Payable Acorp ration...
C) debit to interest Expense D) credit to Interest Expense 9) Under the effective-interest method of...
C) debit to interest Expense D) credit to Interest Expense 9) Under the effective-interest method of amortization, the cash payment on each interest paymer date will: A) remain the same for each interest period B) decrease if bonds are issued at a premium C) increase if bonds are issued at par D) increase if bonds are issued at a discount 10) Current liabilities fall into two categories, which are referred to as: A) contra liabilities and contingent liabilities B) contingent...
please note it is the second interest payment using the wffective interest method of amortization. On...
please note it is the second interest payment using the
wffective interest method of amortization.
On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the second interest payment using the effective interest method of...
Entries for issuing Bonds and Amortizing Discount by straight-Ure H UU On the first day of...
Entries for issuing Bonds and Amortizing Discount by straight-Ure H UU On the first day of its fiscal year, Chin Company issued $10,000,000 of five year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective interest rate of 8%, resulting in Chin Company receiving cash of $9,594,415. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest...
If a bond is trading at 103 the the interest expense is greater than the interest payment. the interest expense is less...
If a bond is trading at 103 the the interest expense is greater than the interest payment. the interest expense is less than the interest payment. the interest expense is equal to the interest payment. the interest expense can not be determined.
A) B) Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day...
A)
B)
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $10 300,000 of five year, 10% bonds to finance its operations or producing and seling home improvement products. interest is payable semiannually. The bonds were issued at a manet (effective) interest rate of 12%, resulting in Chin receiving cash a, ss, 54,861. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First...
If interest expense is less than the contractual interest payment, then A. the note was issued...
If interest expense is less than the contractual interest payment, then A. the note was issued at a premium. B. the note was issued at a discount. C. the note was issued at par. D. the company should refinance the note to get a better interest rate.
QUESTION 46 The interest expense recorded on an interest payment date is increased A. by the amortization of discount on bonds payable. B. by the amortization of premium on bonds payable. C. only if the bonds were sold at face value. D.only if the market rate of interest is less than the stated rate of interest on that date. QUESTION 47 Spice Company reported net income of $90,000 for the year. During the year, accounts receivable increased by $6,000, accounts...
How does a company account for the difference between interest expense and the cash payment of interest when bonds are issued at less than their face value? O A. The difference is accounted for using Bonds Payable OB. The difference is accounted for using Amortization of Bond Discount OC. The difference is accounted for using Amortization of Bond Premium. O D. In this situation the cash payment of interest will exceed interest expense The carrying amount of bonds issued at...
9) Under the effective-interest method of amortization, the cash payment on each interest pas date will: A) remain the same for each interest period B) decrease if bonds are issued at a premium C) increase if bonds are issued at par D) increase if bonds are issued at a discount 10) Current liabilities fall into two categories, which are referred to as: A) contra liabilities and contingent liabilities B) contingent liabilities and non contingent liabilities C) liabilities of a known...
n stock is issued for an amount greater than par value 8. should be credited to a. Retained Earnings b. Cash c. Legal Capital d. Paid-in Capital in Excess of Par e. Unrealized Holding Gains and Losses-Equity to record the amortization of a premium on bonds payable is a. Premium on Bonds Payable b. Interest Expense c. Interest Expense d. Bonds Payable e. Premium on Bonds Payable Interest Expense Premium on Bonds Payable Cash Interest Expense Interest Payable Acorp ration...
C) debit to interest Expense D) credit to Interest Expense 9) Under the effective-interest method of amortization, the cash payment on each interest paymer date will: A) remain the same for each interest period B) decrease if bonds are issued at a premium C) increase if bonds are issued at par D) increase if bonds are issued at a discount 10) Current liabilities fall into two categories, which are referred to as: A) contra liabilities and contingent liabilities B) contingent...
please note it is the second interest payment using the
wffective interest method of amortization.
On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the second interest payment using the effective interest method of...
Entries for issuing Bonds and Amortizing Discount by straight-Ure H UU On the first day of its fiscal year, Chin Company issued $10,000,000 of five year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective interest rate of 8%, resulting in Chin Company receiving cash of $9,594,415. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest...
A)
B)
Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Chin Company issued $10 300,000 of five year, 10% bonds to finance its operations or producing and seling home improvement products. interest is payable semiannually. The bonds were issued at a manet (effective) interest rate of 12%, resulting in Chin receiving cash a, ss, 54,861. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First...
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