Question

Don’t need explination, just answers

Answer 1

Answers

• Question 41

The correct answer is Option 3^rd:

The carrying Value decreases from the PAR Value to the ISSUE PRICE over Bonds term.

The carrying value decreases by the amount of Premium amortised each period.

• Question 42

The correct answer is Option 2^nd: The face value of the Long Term Notes payable LESS total of all future Interest payments.

• Question 43

Period	Cash payment	Interest expense	Discount on Bonds payable	Carrying Value of Bond
Issued			$               18,639.00 to be amortised over 10 Term = $ 1863.9	$                   4,41,361.00
#1 payment of interest	$                  16,100.00 [460000 x 7% x 6/12]	$            17,963.90 [16100 + 1863.9]	$ 1,863.9	$                   4,42,915.44

Hence, based on above working, the correct answer is Option 1^st:

Debit Interest Expense $ 17,963.90
Credit Discount on Bonds Payable $ 186.90
Credit Cash $ 16,100