Homework Answers
36) Answer is Option a.
If bonds are issued initially at a premium and the effective interest method of ammortisation is used interest expense in the earlier years will be greater than if the straight line method were used.
37) Answer is Option d.
Stockholders equity is classified into earned capital and contributed capital.
38) Answer is Option d.
The periodic interest expense is equal to market rate multiplied by beginning of the period carrying amount if bonds in effective interest method.
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36. If bonds are issued initially at a premium and the effective-interest method of amortization is...
if bonds are issued initially at a premium and the effective interest method of amortization is...
if bonds are issued initially at a premium and the effective interest method of amortization is used, interest expense in the earlier years will be a. greater than if th straight line methid werr used b. greater than if the amount of interst payments c. the same as if the straight line method were used d. less than if the straight line method were used for extra point, please support your answer.
Hi, please help to these questions and explain why? S26 Ch14/. If bonds are issued initially...
Hi, please help to these questions and explain why? S26 Ch14/. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be a. greater than if the straight-line method were used. b. greater than the amount of the interest payments. c the same as if the straight-line method were used. 7 Ch14/. Amortization of a premium increases bond interest expense, while amortization of a discount decreases bond...
Both the straight-line method and the effective-interest method of amortization will always result in the same...
Both the straight-line method and the effective-interest method
of amortization will always result in
the same amount of interest expense being recognized each
year.
the same carrying value each year during the term of the
bonds.
more interest expense being recognized than if premium or
discounts were not amortized.
the same amount of interest expense being recognized over the
term of the bonds.
Hi, please help to these questions and explain why? 7 Ch14/. Amortization of a premium increases...
Hi, please help to these questions and explain why? 7 Ch14/. Amortization of a premium increases bond interest expense, while amortization of a discount decreases bond interest expense? S26 Ch14/. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be a. greater than if the straight-line method were used. b. greater than the amount of the interest payments. c the same as if the straight-line method...
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...
Dl credit to interest Expense 9) Under the effective interest method of amortization the cash samment...
Dl credit to interest Expense 9) Under the effective interest method of amortization the cash samment on A C ntheforchrest period si decrease if bands are issued at a premium crease beds are med at par increase bends data 10) Current abilities fall into two categories which are referred to as A) contra labies and contingent liabilities B) contenties and non contingent l es Clities of a known amount and lateswho t ube be of known amount and contingent es...
The effective-interest method of bond amortization finds the difference between the ________ times the ________ and...
The effective-interest method of bond amortization finds the difference between the ________ times the ________ and the ________ times the ________. stated interest rate, principal, stated interest rate, carrying value stated interest rate, principal, market interest rate, carrying value stated interest rate, carrying value, market interest rate, principal market interest rate, carrying value, market interest rate, principal The International Financial Reporting Standards require the use of ________. any method of amortization of bond premiums the straight-line method of amortization of...
Bond Amortization = Bond Discount or Premium / Number of Interest Periods Interest Paid = Face...
Bond Amortization = Bond Discount or Premium / Number of Interest Periods Interest Paid = Face Amount of Bonds x Stated Interest Rate Interest Expense = Interest Paid + Discount ( or – Premium) Amortization On October 1, 2018 ABC issued 5%, 10-year bonds with a face value of $4,000,000 at 104. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis. What is interest expense for 2018? Assume ABC Company...
When bonds are issued at a discount and interest expense is recorded at the effective interest...
When bonds are issued at a discount and interest expense is recorded at the effective interest rate, interest expense in the earlier years of the term to maturity will be Less than the cash interest payments made. Less than if the straight-line method were used. Greater that if the straight-line method were used. The same as if the straight-line method were used.
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...
Both the straight-line method and the effective-interest method
of amortization will always result in
the same amount of interest expense being recognized each
year.
the same carrying value each year during the term of the
bonds.
more interest expense being recognized than if premium or
discounts were not amortized.
the same amount of interest expense being recognized over the
term of the bonds.
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...
Dl credit to interest Expense 9) Under the effective interest method of amortization the cash samment on A C ntheforchrest period si decrease if bands are issued at a premium crease beds are med at par increase bends data 10) Current abilities fall into two categories which are referred to as A) contra labies and contingent liabilities B) contenties and non contingent l es Clities of a known amount and lateswho t ube be of known amount and contingent es...
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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